By Leith van Onselen
With the Australian Bureau of Statistics (ABS) scheduled to release the March Housing Finance statistics next week, I thought it would be worthwhile to update readers on recently released Victorian Department of Sustainability & Environment (DSE) transfer and mortgage data for the month of April, which shows continued weakness in the number of housing transfers and finance commitments.
First, below is a chart showing the rolling annual number of housing transfers from April 2003 to April 2012:
According to the DSE, the annual number of Victorian home transfers rose slightly over the month – from 172,658 in March 2012 to 172,702 – but remained 12% below average levels and below the depths reached during the Global Financial Crisis.
The DSE’s mortgage finance statistics are unique in that they provide data on both mortgage lodgements (i.e. new mortgages) and mortgage discharges (i.e. mortgages repaid in-full). Below is a monthly chart showing both series on a 3-month moving average (3MMA) basis:
And below is the same data shown on a rolling 12-month basis:
And below is the number of net new mortgages created, calculated by subtracting mortgage discharges from mortgage lodgements:
According to the DSE, the annual number of mortgages discharged (191,582) actually exceeded the number of mortgage lodgements (191,480), meaning that 102 mortgages were lost in the State of Victoria in the 12-months to April. This compares to the average of around 13,800 annual net mortgage creations since the series began in 2002.
And below is a similar chart showing that the ratio of mortgages lodged to mortgages discharged:
Between 2003 and 2005, there were around 11 mortgages created for every 10 mortgages discharged. In the 12-months to April 2012, however, the number of mortgages lodged has slipped just below the number of mortgages discharged, signalling that Victorians are deleveraging.
Finally, below are two charts plotting the ABS established house price series for Melbourne against both the number of housing transfers and mortgage lodgements:
As you can see, there is a reasonable correlation between the growth of house prices and the growth of both transfers and mortgages.
Overall, the weakness of the DSE data supports the latest dwelling price results for Melbourne, and suggests that the Melbourne housing market will remain weak into the future.
The Victorian Government will also be lamenting the collapse of housing transfers (home sales), given its heavy reliance on stamp duty reveunes.
