$354,000 – THE AVERAGE SIZE OF A NEW MORTGAGE IN AUSTRALIA REACHES RECORD: JULY MORTGAGE FIGURES
The average new mortgage lodged in Australia rose to $354,000 in July – the highest figure on record, according to AFG, Australia’s largest mortgage broker. AFG’s Mortgage Index shows that average mortgage sizes have been on the rise since May this year, after falling to a low of $339,000 in January.
As other institutions report rises in house prices, the AFG data shows that borrowers in New South Wales, Queensland and Victoria are especially willing to take on more debt. Queensland’s average mortgage size hit a new record of just over $339,000. The average mortgage sizes for New South Wales ($407,000) and Victoria ($321,000), though lower than some of the peaks recorded in late 2008, are the highest for 2009, well up on figures for earlier this year.
The AFG Mortgage Index also shows a dramatic decline in the popularity of fixed rate mortgages, which fell from 8.3% of all mortgages lodged in June, to only 5.0% in July – a fall of almost 40%. Given that fixed rate mortgages now factor in future interest rate rises, the decline in consumer interest suggests that many buyers feel they may have missed the boat in locking in low rates earlier this year.
Mark Hewitt, General Manager Sales and Operations says: ‘As every week goes by we’re seeing growing signs of confidence in the property market. Recent reports of house price increases are stimulating the market as a whole, and encouraging investors in particular. That said, because interest rates remain at forty year lows, we’d encourage buyers to take into account the fact that their mortgages will almost certainly cost more to service as the overall economy picks up.’
AFG data confirmed the trend of investors returning to market, with 30% of all mortgages arranged for investors – up from a low of 24.5% in March. The investment trend was particularly high in New South Wales and Queensland, where 34% and 33% respectively of all loans arranged were for investors.
The share of first home buyers remained steady at 19% of the mortgage market.
Download – August Mortgage Index – National