The Reserve Bank of Australia (RBA) has released mortgage growth data for March, which reveals that mortgage demand continues to fade.
Quarterly mortgage credit growth slowed further to 1.8% – down 0.3% from January’s 12-year high:
Owner-occupiers continue to drive mortgage growth, rising by 1.9% over the quarter versus 1.7% growth for investors:
However, annual mortgage growth continues to rise from record low levels. It rose to 7.9% in the year to April 2022 – the highest level since August 2010:
Again, this growth is being driven by owner-occupiers, whose annual mortgage growth was 9.0% in the year to April 2022, versus 5.8% growth in investor mortgages:
The slowing mortgage demand makes sense given mortgage rates – both fixed and variable – have risen from their pandemic lows.
Other things equal, rising mortgage rates reduces how much a purchaser can borrow and shrinks the pool of potential buyers.
With interest rates tipped to rise sharply, mortgage demand should slow further in the months ahead.
