The Australian mortgage market fell again in October, according to new data released today by the Australian Bureau of Statistics (ABS).
The total value of new mortgage commitments fell by a seasonally adjusted 2.5% in October 2021 to be up 32.2% year-on-year:
As shown above, owner-occupiers had driven mortgage demand this cycle, whereas investor demand remains just below its 2015 peak.
However, the situation is fast changing with investor mortgages now rising, partly offsetting falling owner-occupier growth.
Accordingly, investor mortgages are now growing at turbo-charged rates, up 89.6% year-on-year versus 15.1% growth for owner-occupiers. Both, however, are below their respective 2021 peaks:
The return of investors continues to crowd-out first home buyers (FHBs). FHB mortgages fell 4.8% in October with their share of new mortgage commitments retracing further to 17.5%. FHB demand has also fallen 4.4% year-on-year in October:
The strong growth in new mortgage commitments is the key reason why Australian property prices have grown so rapidly.
Accordingly, slowing mortgage growth should mean slower price growth.
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