Australian mortgage growth heats up

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

Quarterly mortgage credit growth continued to firm, rising for the 10th consecutive month to 1.6% – the highest rate of growth since August 2017:

Australian mortgage growth

Heating up.

Owner-occupiers continue to drive mortgage growth, rising by 2.0% over the quarter versus 1.0% growth for investors. However, investor mortgage growth is clearly picking up steam:

Investor mortgages

Investor mortgages rebounding.

Meanwhile, annual mortgage growth continues to rise from record low levels. It rose to 4.8% in the year to May 2021 – the highest level since November 2018:

Mortgage growth

Annual mortgage growth picking up.

Again, this growth is being driven by owner-occupiers, whose annual mortgage growth was 6.6% in the year to May 2021, versus only 1.6% growth in investor mortgages:

Annual mortgage growth

Annual mortgage growth still driven by owner-occupiers.

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.

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