Record Fall in Demand for Mortgages
9 July 2020,
Data released by the Australian Bureau of Statistics (ABS) today confirms that the value of mortgage commitments fell by 11.6% in May, seasonally adjusted, more than in any previous month on record.
The main contributors to the decline were New South Wales and Victoria. Falls were reported for all other states except ACT.
Demand from investors fell more than it did from owner occupiers. Owner occupier commitments fell 10.2 per cent and investor commitments fell 15.6 per cent.
The value of investor commitments reached its lowest level since November 2002.
New loan commitments for housing by purpose (seasonally adjusted), monthly growth in value, Australia (ABS)
May saw the largest monthly decline in demand for mortgages in Australia on record although it also saw more owner occupiers refinance with a new lender than any previous month on record according to the ABS. This is a reflection of the unusually low interest rates available.
The downward trend shown in the above table is unlikely to continue at the same trajectory for long although I will not be surprised to see a greater decline in June and July.
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