MORTGAGE SALES RECOVER AFTER THE FLOODS – BUT STILL LOWER THAN MARCH 2010: LATEST FIGURES
New South Wales bucks the trend with stronger figures
Mortgage sales during March saw a recovery from the record lows of January and February, but figures were still 9% lower than those recorded a year ago, according to AFG, Australia’s largest mortgage broker. The AFG Mortgage Index shows that the company processed $2,513 million of home loans in March – up 22% on the February figure of $2,053 million, but still 8.9% lower than the $2,760 million arranged in March 2010. AFG has 10% of the national home loan market and its figures are usually strongly indicative of ABS statistics published six weeks later (Source: ABS and AFG data).
New South Wales bucked the national trend, recording exactly the same figure for mortgage sales in March 2011 as March 2010. Elsewhere South Australia saw a slight year on year softening (-2.7%) with greater differences recorded for Western Australia (-10.9%), Victoria (-11.7%) and Queensland (-15.4%).
New South Wales also showed the highest level of investor activity, with 40.2% of all new home loans being processed for investors – well above the national average of 34.7%.
Mark Hewitt, General Manager of Sales & Operations says: ‘After two months of extraordinarily subdued mortgage markets, we’re now seeing a slight return of buyer confidence. The RBA holding off further rate rises has given some sense of normality, and while the lender wars haven’t encouraged many people to switch, at least there is now a feeling that lenders are trying to be competitive.
In our view, last month’s banning of exit fees will have little, if any positive effect on the market in the short term, and will certainly hurt non-major lenders going forward. What’s needed, right now, is a strong dose of economic confidence.’
The AFG Mortgage Index shows that refinancing has remained steady at 36.9%, and if anything has declined since last year, suggesting that consumers are sceptical there is any real benefit to changing lender.
Download – April Mortgage Index – National