Australian mortgage growth rockets

The Reserve Bank of Australia (RBA) has released its private sector credit aggregates data for the month of March.

Quarterly mortgage credit growth continued to firm, rising for the 8th consecutive month to 1.4% – the highest rate of growth since March 2018:

Quarterly mortgage growth

Quarterly mortgage growth is accelerating alongside dwelling values.

Owner-occupiers continue to drive mortgage growth, rising by 1.8% over the quarter versus only 0.5% growth for investors:

Quarterly mortgage growth

Owner-occupiers continue to drive mortgage growth.

Meanwhile, annual mortgage growth continues to rise from record low levels. It rose to 4.1% in the year to March 2021 – the highest level since February 2019:

Annual mortgage growth

Annual mortgage growth continues to rebound from record lows.

Again, this growth is being driven by owner-occupiers, whose annual mortgage growth was 6.1% in the year to March 2021, versus only 0.55% growth in investor mortgages:

Annual mortgage growth

Owner-occupied mortgage growth strong, investor mortgage growth weak.

The acceleration in mortgage growth is obviously far slower than the acceleration in new mortgage commitments. This is because existing mortgage holders are taking advantage of record low interest rates to repay debt, which is mostly offsetting new mortgage demand.

Unconventional Economist

Comments

  1. Yeah. So is Terrorism. I wonder if the two are related? lol
    https://www.abc.net.au/news/2021-04-29/asio-anticipating-terrorist-attack-in-the-next-year/13322520

    and Social Inequality… and Domestic Violence… and the destruction of our Business Sector… and the Spread of Covid… and Australias collapsing economy.

    When it comes down to it, its all because House Prices are too expensive.

    Its almost like if you fixed that, all this other stuff would go away ha ha.

    • Jumping jack flash

      “When it comes down to it, its all because House Prices are too expensive”

      No! In a debt economy where debt is used to buy houses, house prices can never be too expensive. The problem becomes that nobody is eligible for the amount of debt that is required to buy them.

      Fix debt eligibility criteria and houses will be bought.

      Furthermore, debt is already cheap enough to buy incredibly expensive houses on modest incomes, the barrier is the debt ponzi buy-in, or the “deposit” which is ridiculously a percentage of the price! That will never work! Simple maths shows that if a percentage of the price is used as a hurdle to eligibility, then as house prices approach infinity, then the buy-in also approaches infinity… and that means their system cannot work.

  2. Jumping jack flash

    At first glance, well done, but on closer inspection of that last chart, it is actually very, very bad!

    We have a long way to go before we will be close to achieving the debt growth of the last golden age of debt in the late 00s. Will we achieve it? I don’t know.

    The last chart explains the last decade succinctly. It also answers the big questions around why interest rates were slashed back-to-back. It explains why the COVID stimulus was the size it was, why it needed to be bigger, better targeted, and why it will be eventually shown to have ultimately failed its true agenda.

    The jury is still out on the US, they are doing their best to prolong the COVID emergency to magick more money up to seed CPI and hopefully get the debt growing again and self-sustaining, i.e, hyperinflating, but you know, not too crazy, at least at first. If the US pulls it off, will it be enough to rescue the world from debt deflation? We will see.