The Australian mortgage market remained red hot in May, 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 4.9% in May 2021 to be up 95.4% year-on-year:
As shown above, the record increase in new mortgage commitments has been driven by owner-occupiers, whereas investor demand remains just below its 2015 peak.
That said, investor mortgages are now growing at turbo-charged rates, up 116% year-on-year versus 88% growth for owner-occupiers:
The return of investors continues to crowd-out first home buyers (FHBs). Their share of new mortgage commitments retraced further to 21.0%. That said, FHB demand remains strong overall, up 81.8% year-on-year in May:
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.