Record quarter as homebuyers on the move

Australian Finance Group (ASX:AFG) has today announced a record-breaking quarter with more than $19.9 billion of home finance lodged by AFG brokers across the second quarter of the 2021 financial year.

AFG CEO David Bailey explained the results: “The national figure represents an increase of 9.5% on the first quarter of the 2021 financial year and an increase of 30% on the corresponding quarter last year.

“Gains were recorded across the country – New South Wales up 3.5% for the quarter, Queensland up 7.8%, South Australia up 0.4%, Victoria up 18% and Western Australia recording a 13.3% jump on Q1 2021. The Northern Territory recorded a drop of 10%.

“With travel off the agenda for many, the home has become even more important and 42% of lodgements were for those upgrading their homes.

“Government incentives for First Home Buyers continue to support those looking for their first home with 22% of lodgements being made by those taking their first steps into the housing market,” he said. “A record high Loan to Value Ratio of 73% is due to the high proportion of First Home Buyers who typically have smaller deposits.

The percentage of Investor loans being taken out remains at an all-time low of 21%.

“The market is well aware that low interest rates are likely bottoming out and this has seen the percentage of customers choosing a Fixed Rate product still high at 29.2%,” he said.

“Low interest rates on offer has also meant homeowners are taking the opportunity to pay down their debt faster with a record 88% choosing a Principal & Interest product over an Interest Only loan. The average loan size is also at record levels, coming in at $544,359 for the quarter.

“With the four big banks leveraging their funding advantage through very competitive pricing and cash back offers, smaller lenders’ share of the market has remained at 41%.

“The Westpac stable of brands – Westpac, BOM, BankSA and St George – have increased their combined market share by 2.5% to be sitting at 18.7% while CBA group – CBA and Bankwest – have dropped 4.7% to now be holding 20.7% of the market.

The federal government has outlined the importance of access to credit for the economic recovery of the country. To help gauge the flow of activity in the market and the time involved for a residential application to progress to formal approval, AFG will now include a weighted average Lender Turnaround Time (LTT) indicator in the AFG Index.

“The LTT analysis shows the average number of days from submission of the loan application
by the broker, to the lender providing formal approval, is sitting at 25 days. Reflective of the level of activity in the market, this is the highest it has been at any point over the last three years and a blow out of around 4 days from 12 months ago,” he concluded.

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AFG appoints State Sales Manager for Queensland and the Northern Territory

After five years as a star performer within the AFG Home Loans business, Adam Barker has been appointed to the role of State Sales Manager for Queensland and the Northern Territory at AFG.

AFG National Manager – Strategic Partners and Recruitment Them Lam announced the appointment to staff today. “By taking on the State Sales Manager role Adam will now shift his focus to work alongside AFG’s industry partners in Queensland and NT and to take on the responsibility for the recruitment of new brokers and broker businesses to AFG.

Adam will also join the AFG Strategic Partnership team and will work closely with Them to support AFG’s strategic partners located in his region.

“We believe Adam is the perfect fit for the role and the right person to head up this important part of the business,” said Them. “I am very confident Adam will make his mark on the role.”

After a long career in the banking and finance industry Adam is looking forward to the challenges his new role will bring. “Taking on the role of State Sales Manager was an easy decision,” he said. “I firmly believe that AFG has the staff and resources to help any broker business – small, medium or large – grow and be equipped with market leading tools and support.

“It is a passion of mine to build and maintain strong relationships within the industry and there’s no better opportunity to do that than in this role.

“I’m also really looking forward to working closely with our lender partners and assisting them with the organisation and roll out of our very successful regular Lender Training Sessions and Professional Development Days.”

Adam begins in the role this week.