Mortgage demand remains red hot

The Australian mortgage market remains red hot according to new data released today by the Australian Bureau of Statistics (ABS).

While the value of new mortgage commitments retraced by a seasonally adjusted 0.4% in February 2021, it was up 48.8% year-on-year and remains only a whisker below all-time highs:

Australian new mortgage commitments

New mortgage commitments remain near record highs.

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The growth in new mortgage commitments continues to be driven by owner-occupiers, whose mortgage commitments rose by 55.2% year-on-year, well above the 31.6% rise in investor commitments. The annual growth rates are charted below, with overall growth eclipsing previous peaks:

Annual Australian mortgage growth

Annual mortgage growth is running above prior peaks.

Within the owner-occupier space, first home buyer (FHB) demand is booming, rising a whopping 66.8% year-on-year with its share of mortgages at 24.0%:

First home buyer mortgages

First home buyer mortgage demand remains strong.

The strong growth in new mortgage commitments is the key reason why Australian property prices are growing so rapidly.

Next week I will compare mortgage growth to price growth across the major capital city markets.

Unconventional Economist

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