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Mortgage Index – December 2010

SURPRISE BOUNCE IN MORTGAGE MARKET AFTER LATEST RATE HIKES: NOVEMBER FIGURES

Dramatic rise in Fixed rate loans

Australia’s mortgage market proved surprisingly resilient in November, with mortgage sales figures increasing by 12.4% over October according to AFG, Australia’s largest mortgage broker. AFG Mortgage Index shows the company arranged $2.51 billion in home loans in November compared to $2.23 billion the month before. On a national basis, this was the company’s strongest November since 2007.

Across Australia, mortgage sales in November grew by 25.7% in WA, 12.1% in NSW, 8.1% in Victoria, 6.5% in SA and 5.6% in QLD.

In response to some aggressive fixed rate marketing by the banks, there was also a dramatic shift to Fixed rate home loans in November, which jumped from 6.3% of all new mortgages arranged in October to 9% in November – the highest figure for Fixed home loans recorded since June 2008.

Mark Hewitt, General Manager of Sales & Operations says: ‘November has traditionally been a strong month for mortgage sales. This year we didn’t see the usual spring uplift in the preceding months, and it’s possible that many buyers were sitting on their hands, waiting for greater certainty about the economy in general, and out of cycle rate rises in particular. Now that we’ve had the rate rise, more buyers seem to be coming off the fence.’

Despite the angry reaction to the most recent round of out of cycle rate hikes, refinancing increased only slightly in November, from 37.8% to 38.5% of all mortgages arranged by the company. Latest ABS statistics for the September quarter show that the bank market share is still 87% of the home loan market, although AFG figures suggest that this figure fell to 79% by November.

Download – December Mortgage Index – National

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