Mortgage Index December 2013


Worst ever First Home Buyer figure for NSW – 2.8%

The average mortgage processed in November was for $436,000 – an 8% increase on the $404,000 figure in May this year, according to AFG, Australia’s largest mortgage broker. November figures from AFG published today show average home loans have increased fairly steadily in size during the past six months.

During this same period, the proportion of first home buyers has steadily declined from 13.6% of all mortgages processed in May to 10.3% in November – a decline of 24%. The increase in average home loans may therefore be as much a consequence of greater participation by investors and borrowers seeking to upgrade their homes, than of rising house prices.

Participation by first home buyers varies dramatically by state, with AFG recording its worst ever figure for NSW, where only 2.8% of new mortgages

were for first home buyers – compared with 48.5% for investors. Elsewhere, first home buyers comprised 6.2% in QLD, 11.4% in VIC, 16% in SA and 20.2% in WA. While WA has led the nation for first home buying activity over the past year, this 20% figure is still much lower than the 24.4% figure recorded six months ago in May 2013.

Mark Hewitt, General Manager of Sales and Operations says: ‘Overall, the mortgage market is in robust, good health, and it’s encouraging to see more people willing to upgrade their homes and buy investment properties. But urgent action is needed to address the absence of first home buyers from markets in NSW and QLD. We need to see a lot more people get on the property ladder to underpin the long term sustainability of those markets.’

Loan to value ratios – the value of a loan expressed as a percentage of a property value – have held steady over the past six months, moving between 68.2% and 69.1%.

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