The mortgage market has never been hotter

The Australian mortgage market has continued its record run, according to new data released today by the Australian Bureau of Statistics (ABS).

Total mortgage commitments (excluding refinancings) rose another 10.5% in January to be up a whopping 44.3% year-on-year.

This growth was driven by owner-occupiers, where mortgage commitments rose by 10.9% over the month to be up 52.3% year-on-year.

By contrast, investor mortgage growth remains relatively subdued, rising 9.4% in January to be up only 22.7% year-on-year.

The next chart plots the time series and shows that investor mortgage growth remains well below its 2015 peak, whereas owner-occupied demand has never been stronger:

In annual growth rate terms, mortgage demand today is even hotter than during the post-GFC boom:

First home buyers mortgage commitments have also hit a record high, although their share of new mortgages (25%) remains below the post-GFC peak (30%):

Today’s house price results for February, published by CoreLogic, were the strongest in 17 years. We can see why, given the unprecedented mortgage growth and record high auction clearance rates.

Australia’s property market is poised for one if its biggest ever booms.

Unconventional Economist
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