The high proportion of so-called "down-traders" active in the residential property market at the moment helps explain the disparity between strong house price growth and weak housing finance growth, according to new research.Australian house prices have grown by around 10 per cent this year and, under normal circumstances, housing finance would grow in line with this. However, housing finance aggregates have been growing at closer to four per cent.The principal of Digital Finance Analytics, Martin North, said that a breakdown of residential property market segments showed that down-traders (baby boomers selling their family homes and shopping for something smaller) were the most active group in the market.North said that half of all down-traders have no borrowings, and among those with mortgages the average loan-to-valuation ratio is around 45 per cent.First-home buyers, who borrow on LVRs of more than 80 per cent, were far less active in the market this year.This disconnect between house prices and credit growth is the theme of the latest JP Morgan Australian Mortgage Industry Report, to which Digital Finance Analytics contributed.North said: "The dynamics in the market now are very different to the years before 2007, when the residential property market was very credit-intensive."This disconnect has been the subject of a lot finance sector analysis lately. An article in the most recent Reserve Bank Bulletin observed that the value of housing loan approvals as a share of outstanding housing credit has risen, yet the pick-up in aggregate housing credit has been modest by comparison. The article said: "One of the possible factors contributing to this divergence is an increase in the rate at which households are repaying their mortgages."The RBA estimated that the mortgage pre-payment rate, based on data provided by banks to the Australian Prudential Regulation Authority, increased by 90 basis points between September 2011 and June this year.Research by UBS banking analyst Jonathon Mott came to a similar conclusion. It said that credit growth statistics miss the large flows into and out of the banks' mortgage books.The UBS report said: "There is an assumption that the bank that writes the most new business delivers the highest credit growth. This is not necessarily the case. New fundings are the biggest moving part but are only one factor."Mortgage flows can be broken down into new funding, re-draws, interest and fees, pre-payments, property sales and external refinancing."