CBA: Mortgage lending strong again in September

According to CBA’s internal data, Australian mortgage lending strengthened further in September, up 30% year-on-year:

However, average loan sizes are shrinking; albeit are still higher year-over-year:

The share of fixed rate lending remained at high levels, driven by fixed rates being lower than variable rates:

Lending for renovations continued to grow, likely driven by people spending more time at home and lower borrowing rates:

Mortgage growth is one of the best indicators for property price growth having displayed a very strong historical correlation:

Thus, this CBA data is bullish for Australian property values, assuming it is replicated across the mortgage market (as previous CBA releases have been).

Unconventional Economist
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Comments

  1. boomengineeringMEMBER

    Too bad we all weren’t as strong as Aust RE then we wouldn’t need lockdowns. You just can’t kill it.

    • To be fair, it’s got the full support of the ADF on call, as guaranteed by the Federal government.

  2. House price bubbles and used car inflation across the globe. This analysis needs more analysis. Unless we’re going back to the previous normal which would surprise me

    • Trillions of dollars of printed money pumped into the global economy has a tendency to be a little inflationary

      • The Traveling Wilbur

        Oh no you don’t, you can’t talk about inflation and house prices in the same sentence. Because the cost of housing is irrelevant as it’s an asset. So it doesn’t matter if it goes up 299% as far as measuring inflation is concerned.

        Sweeper said. So it must be true.

  3. Display NameMEMBER

    Sub-prime bonanza now banks are not checking the veracity of peoples wages and expense claims?

    I keep remembering the UBS analysis of loans submitted to the RC.The broker originated loans from NAB showed that over 30% of families claimed incomes in excess of 500K.Clearly very good targeting by brokers at NAB. And banks don’t make loans that are not good for the bank….And the banks dont really need to the TFF, they just “like” using it.

    • The Traveling Wilbur

      Technically it would be the longer term effects of something like COVID that would pop this bubble. Jury is still out on this one until all the COVID specific stimulus washes out of the economy and all the true zombie BNs and ACNs finally cease trading officially.

      However, it’s Australia, so just assume RE will be supported further as required anyway after all of that happens.

      • TTW, that is one of the biggest misunderstandings: government support will not be reduced until economy is back to an extend to support ultra-high proprty prices (which can be years). Also, IR will not go up, rather the government will print money directly into the banks balance sheets to keep them going.

  4. blindjusticeMEMBER

    Any info on foreign purchases of Australian real estate? Can property be purchased from overseas thus providing a ticket to Australia for residency to escape covid?

  5. Blind Freddy can see what’s going on here. Recent data suggested FHBs were absolutely booming. Why? As a couple you could each pull $20K out of super, plus Government grants of $40K and voila even those who can’t save suddenly have $80K to get onto the ladder.