AFG CALLS ON GOVERNMENT TO BOOST CONSUMER CONFIDENCE AFTER ANOTHER FLAT MONTH: APRIL FIGURES
AFG, Australia’s largest mortgage broker, has called on the Government to address weak consumer confidence, after figures for April showed mortgage sales fell by nearly 10% compared to April 2010. AFG processed $2.1 billion in mortgages in April 2011 compared to $2.3 billion in April last year and $2.8 billion in April 2009.
Month on month figures showed an even larger fall of 15.6% – but this drop in volume also reflects the impact of the extended Easter and Anzac public holidays. On a volume per business day basis, April was somewhat higher ($117 million) than March ($111 million), but both these figures are well below those recorded in previous years.
Mark Hewitt, General Manager of Sales and Operations says: ‘Falling property prices, rising interest rates, the increasing cost of living and the fear of a carbon tax and other levies are a toxic combination to consumer confidence. As people start to see their net worth eroding because of falling home and investment property values, they become even less likely to spend. The Government needs to address this problem in its forthcoming budget, and provide a circuit breaker to restore confidence among consumers that the underlying fundamentals of our economy are still strong.’
New South Wales was the most popular with First Home Buyers, who comprised 17.3% of all mortgages processed in the state – well above the national average of 13.9%. It was also second highest in popularity with property investors who accounted for 37.5% of all new mortgages processed – the most popular investment market being Victoria, where 38.4% of mortgages were processed for investors.
Fixed rate home loans remained steady, comprising 6.4% of the product mix, reflecting consumer caution at locking in rates over the long term.
Refinancing figures were also unchanged, accounting for 36.7% of all new home loans processed in April.
Download – May Mortgage Index – National