The Australian Bureau of Statistics (ABS) has released mortgage data for December with the value of mortgage originations (excluding refinancings) collapsing by 4.3% over the month and by 29.3% year-on-year.
The decline is broad-based with owner-occupier mortgages down 29.8% annually and investor mortgages down 28.3%:
As illustrated in the next chart, the annual growth in new mortgage originations (excluding refinancings) has collapsed:
First home buyer mortgage originations have also collapsed, down 35.9% year-on-year:
These results are obviously negative for Australian house prices given the growth in mortgages (excluding refinancings) is the key driver of dwelling values.
The 3.0% of interest rate hikes from the Reserve Bank of Australia (RBA) has already reduced borrowing capacity by around one third.
With the RBA expected to hike again by 0.25% on Tuesday, and further increases possible over following months, house prices will continue to fall.
A house price turnaround is unlikely until the RBA commences a rate cutting cycle and mortgage demand begins to lift.
