December’s housing finance data from the Australian Bureau of Statistics (ABS) revealed that mortgage demand has rocketed to unprecedented levels after experiencing 31% growth year-on-year:
CBA’s economics team has released new internal mortgage data showing that the strong momentum continued in January, with new lending for housing soaring to new highs:
New lending for housing continues to grow at a strong pace. Lending growth is a good leading indicator of movements in dwelling prices. We expect dwelling prices to rise by around 14% over the next two years…
The share of fixed rate mortgages remains near all-time highs (circa 40%), reflecting the rock-bottom borrowing rates on offer:
Aussies are also borrowing large for renovations, with lending growing at a very strong pace:
Given CBA is the nation’s biggest bank, we can be confident that its loan book reflects the broader market.
As we know, mortgage growth is the best single short-term indicator for property prices, typically leading prices by about six months:
Thus, the fuse is lit and Australian property prices are set to boom!