Today’s new mortgage data from the Australian Bureau of Statistics (ABS) recorded a strong rebound in July as COVID-19 restrictions were eased:
The next chart plots the time series:
Total new mortgage commitments (excluding refinancings) rose by 8.9% in July, with owner-occupied mortgages surging 10.7% and investor mortgages rising 3.5%.
Year-on-year, total new mortgage commitments (excluding refinancings) rose by 11.8%, with owner-occupier mortgages surging by 18.5% but investor mortgages falling 5.1%:
First home buyer (FHB) mortgages surged 10.6% in July, with their share of total mortgages at 22.4% – the equal highest level since the GFC:
This 8.9% rebound was far bigger than consensus forecasts (+2.0%). If it continues over the next several months, it will point to stabilisation and then recovery of the housing market.
That said, this data partly pre-dates the virus resurgence in Victoria and subsequent escalating shutdowns. It also doesn’t take into account the unwinding of emergency income support, mortgage repayment deferrals, etc, that will hit later this year and into early 2021.
Thus, the picture facing the property market remains murky.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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