Loan sizes up 6pc since May

Mortgage sizes increase

The average mortgage size has increased by 6 per cent since the election according to the latest ABS figures. 

There are different ways to dice up these figures - between established and new dwellings, and so on - but looking at owner-occupier mortgages (excluding refinancing) confirms the average mortgage size in New South Wales rising to a record high.

In Victoria the average mortgage size is rising again, following a preceding slump. 

These trends suggest that the strongest markets right now are likely to be inner Sydney and Melbourne, in that order, with Brisbane now returning to steady price growth after a hiatus. 

In what appears to be a chronic case of conformation bias a number of permabear observers are clinging to a theory that the housing rebound is a hoax (loosely hung upon a cautionary comment made my mate Nerida Conisbee, Chief Economist at REA Group, a month or two ago).

Well, it's all happening!

Quite likely there's a good deal less bullish action going on out in suburbia, but inner Sydney and Melbourne will be breaking fresh highs imminently.

The conspiracy theorists may be well advised to take a closer look at the latest SOMP, which was telling.

The RBA further noted that although new housing loan flows are picking up solidly, there's been nothing of concern in the housing credit growth figures to date, especially since more households have taken advantage of record low mortgage rates to pay down debt.

In terms of risks for the economy, finance for new construction remains weak, and this could lead to problems down the track.