As regular readers know, I consider the growth in new mortgage commitments to be the key short-term indicator for property prices.
The latest ABS housing finance data for November, released on Friday, showed that mortgage growth slowed sharply over the prior six months. This suggests that dwelling value growth should slow given most homes in Australia are purchased with a mortgage.
The next chart plots the ABS’ quarterly mortgage growth against CoreLogic’s 5-city dwelling values index. This shows the strong correlation between mortgages and prices; albeit with mortgages typically leading prices by around two quarters:
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