Mortgages point to softer property prices

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On Tuesday, the Australian Bureau of Statistics (ABS) released data on new finance commitments, which registered the first decline in mortgages for nine months:

Australian mortgage demand

Australian mortgage demand fell in June.

As regular readers know, the growth in new mortgage commitments has historically been correlated very strongly with dwelling value growth. The reason is straightforward: the overwhelming majority of buyers borrow to purchase a home. Therefore, when mortgage demand rises, so does property prices.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.