Yesterday’s mortgage finance data from the Australian Bureau of Statistics (ABS) was unambiguously strong, driven by owner-occupiers:
Total new mortgage commitments (excluding refinancings) rose by 25.5% year-on-year in September, driven by a whopping 33.8% growth in owner-occupier mortgage commitments versus 4.2% growth in investor commitments.
As regular readers know, mortgage growth is one of the best indicators for property price growth having displayed a very strong historical correlation.
Below are charts plotting the annual value of mortgage growth (excluding refinancings) against annual dwelling value growth.
Finally, below is the 5-City aggregate:
As shown above, the mortgage rebounds have been strongest across the smaller three capitals, which is also reflected in their recent price rebound:
Brisbane and Perth are looking especially enticing.
By contrast, Sydney’s mortgage market has only experienced a moderate rebound, pointing to moderate growth, whereas Melbourne’s remains soft.