Australian mortgage market collapses

Today’s new mortgage data from the Australian Bureau of Statistics (ABS) recorded a big fall as the COVID-19 shutdown took effect:

The next chart plots the time series:

Total new mortgage commitments (excluding refinancings) dived by 11.6% in May, with owner-occupied mortgages falling 10.2% and investor mortgages falling 15.6%.

Year-on-year, total new mortgage commitments (excluding refinancings) rose by 1.8%, with owner-occupier mortgages rising by 7.3% and investor mortgages collapsing 19.3%:

First home buyer (FHB) mortgages fell 1.9% in April, with their share of total mortgages at 22.3%:

Pretty much as expected.

Leith van Onselen
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Comments

  1. Reus's largeMEMBER

    When loan growth goes negative then the SHTF, the ponzi relies on ever increasing loan growth as well as ever increasing new money flowing into the country, if both are negative then look out below

  2. Didn’t hear anything from Chris Joy and his mates recently, the market must have hit the imaginary 10% increase he was talking about by July or something

    • Fat Wolverine will be proven right in the long run you just need to believe….ahhhhhh!

    • Strange EconomicsMEMBER

      So an 11.6 % drop in RE prices to match finance drop? Hidden as price signals don’t happen, as people refuse to sell at the new low price, so listing price remains.

      • Don’t expect to transparency in any event. Bezzle is the only game in town.

  3. Loan growth might not go negative, I think all the home lenders will be forced to capitalise all the deferred interest payments onto existing mortgage holders as they’re “helping the customer” with up to 6+4 month payment deferrals and the RBA and Stats NZ can then show how great the economies is growing with endless credit growth. then they’ll parade to global investors to say how great A&NZ is doing relative to the world. Please write something if anyone disagrees

    • Reus's largeMEMBER

      They are already doing that, so the numbers would be even worse if they removed that part.

  4. starting to feel like Im the only one paying a mortgage – and CBA just notified that repayments going up. assume increase in rate. nice.

    • They want you sign up for mortgage deferral asap hence they are forcing your hand. Banking experts tell me it is beneficial for the banks to put ppl on mortgage deferral.

      Out of curiosity, what were your rates and what are the new rates? How many large do you still owe the bank?

      • darklydrawlMEMBER

        Assuming things don’t go completely t!ts up, then the deferrals would be more profitable for the bank as the the loan is extended, not forgiven. The costs are just pushed out into the future.

    • DominicMEMBER

      Rates going UP? Really?

      You must be exiting a fixed rate lock-in Shirley ..