The Australian mortgage market remained white hot in March, hitting new all-time highs according to new data released today by the Australian Bureau of Statistics (ABS).
The total value of new mortgage commitments rose by a seasonally adjusted 5.5% in March 2021 to be up 55.3% year-on-year:
New mortgage commitments hit another record high in March 2021.
As shown above, the record increase in new mortgage commitments has been driven by owner-occupiers, whereas investor demand remains well below its 2015 and 2017 peaks.
That said, both components are now growing at turbo-charged rates, with owner-occupied commitments up 55.6% year-on-year in March and investor mortgage commitments up 54.3%:
Annual growth in both owner-occupied and investor mortgages is running at historical highs.
The return of investors is beginning to crowd-out first home buyers (FHBs). Their share of new mortgage commitments retraced further to 22.6%, whereas the value of FHB commitments has also fallen for two consecutive months. That said, FHB demand remains strong overall, up 61.4% year-on-year in March:
First home buyer demand remains strong but is fading.
The strong growth in new mortgage commitments is the key reason why Australian property prices are growing so rapidly.
Tomorrow I will compare mortgage growth to price growth across the major capital city markets.
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