By Leith van Onselen
With the Australian Bureau of Statistics (ABS) scheduled to release the January Housing Finance data tomorrow, I thought it would be worthwhile to update readers on recently released Victorian Department of Sustainability & Environment (DSE) data for the month of February, 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 February 2003 to February 2012:
According to the DSE, the number of Victorian home transfers were around 11.5% below average in the 12-months to February 2012.
The DSE’s mortgage finance statistics are interesting as 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, only 138 net new mortgages were created in the 12-months to February, well below the average of around 14,000 since the series began in 2002.
And below is a smilar 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 February 2012, however, there were a roughly equal number of mortgages lodged to those discharged.
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 contradicts the latest dwelling price results for Melbourne, and suggests that the Melbourne housing market will remain weak over coming months. It will be interesting to see whether the ABS Housing Finance release tomorrow paints a similar picture.
