Mortgage Index – December 2009


The average new mortgage arranged in Australia in November reached $367,000, the highest on record, according to AFG, Australia’s largest mortgage broker. The AFG Mortgage Index shows that mortgage sizes have been on the rise since the middle of the year, having increased by 6.4% since May. Supporting recent reports of increasing property prices, average mortgage sizes have grown particularly strongly in Victoria – up 12.1% since May and New South Wales – up 10.7%, but less so in WA, where they rose by 3% and Queensland, where they have held steady since May.

November also saw the continuing re-emergence of property investors, who accounted for one in three of all new mortgages arranged (33.8%), the highest such figure all year, and well up on the one in four (24.7%) figure for March when investment reached its lowest point.

However, overall monthly sales of mortgages in November declined for the second month in a row, off the back of increasing interest rates and sharply declining First Home Buyer numbers. First Home Buyers accounted for just 13.7% of all mortgages arranged in November, compared to 28.1% at their peak in March this year.

Mark Hewitt, General Manager of Sales and Operations says: ‘Larger average mortgages and greater activity by investors are usually the signs of a confident market. But confidence is still fragile. October and November are seasonally strong months in the calendar, but we’ve seen two straight months of decline. In our view the RBA has gone too far too fast in ratcheting rates back up again. Yesterday’s unprecedented third monthly rise will do nothing to encourage ordinary families back into the property market.’

AFG Mortgage Index also shows a slight change in the balance of lenders from banks to non-banks during the past two quarters (Table 5) suggesting that second tier lenders are becoming somewhat more competitive as global credit conditions ease.

Download – December Mortgage Index – National