The Australian mortgage market slumped in June after two consecutive rate hikes by the Reserve Bank of Australia (RBA).
According to the Australian Bureau of Statistics (ABS), the total value of new mortgage commitments fell a seasonally adjusted 4.4% in June 2022 and was down 2.0% year-on-year:
Aussie mortgage commitments down after RBA hikes rates.
Owner-occupier commitments fell 3.3% in June, whereas investor commitments fell 6.3%.
The next chart shows divergence across the two categories. Investor mortgage commitments grew by 17.3% in the year to June, versus a 9.6% fall in annual owner-occupier mortgage commitments:
Annual mortgage growth negative.
The recent surge in investor mortgages continues to crowd-out first home buyers (FHBs). FHB mortgages dived 10.0% in June to be down 29.0% year-on-year. FHB’s mortgage share also fell to 14.5% – the lowest reading since 2017:
Investors shaft first home buyers.
First home buyer mortgage share falls to 2017 low.
The above data obviously does not include July’s 0.5% interest rate hike, which is expected to be followed with another 0.5% hike this afternoon.
Given everyone expects the RBA to hike interest rates aggressively over the remainder of the year, mortgage demand will stall as buyers sit on the sidelines.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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Mopping up a couple of trillion dollars of highly suspicious global stimulus using increased interest payments?
Well, i suppose it could work.
How very fortunate for the central banks that everyone has so much debt! There’s no way this strategy would work in a properly functioning economy where debt wasn’t absolutely essential.
After the stimulus is reclaimed from the economy, and that curious “transitory inflation” is slayed, i wonder how they’re going to combat the physical shortage of energy continuing the inflation?
But perhaps we simply won’t need as much energy after this?
The sun pumps out oodles of energy for free and that will limit the pricing power of legacy forms of energy.
Seems we are about to see the mother of all battles between increasingly stranded energy assets and free energy from the sun.
Every million electric cars wipes out about 50 million litres of petrol demand per week.
2 million sold in the first quarter of 2022 is another 100 million litres of demand gone each week and by the end of the year it could be close to 500 million litres of petrol demand gone every week.
Still early days but the impact of that growth will hit petrol markets sooner rather than later.
Cheap petrol might a thing before too long but for the carbon / climate taxes that will be imposed.
Ev to grid charging and discharging is THE thing that will dramatically descrease fossil fuels in the energy mix.
Your average EV doesn’t drive very far yet carrys enough electricity to power the average home for 4-8 days depending on how inefficient your home is.
Put that together with oversized solar PV and many households will never pay another electricity or fuel bill again (or at least only pay tiny ones)
Global coal consumption almost hit a record high in 2021: https://www.iea.org/reports/coal-market-update-july-2022/demand
It most likely would have been a record high if it weren’t for COVID lockdowns suppressing energy consumption. This means 2022 could likely break the all time record for coal consumption. It’s not really going the way of a “stranded asset”.
Energy from the sun is certainly free, but the enormous amount of infrastructure required to capture and store this very dilute form of energy is not. Of course the sun’s energy has been stored and concentrated for us naturally in the form of coal/gas/oil, and this packaging is incredibly useful and convenient, which is why there’s such high demand for it.
Just a little feedback – it would be great if the investors vs FHB colours were consistent across the graphs