Mortgage Index – December 2014

Only 1 in 50 NSW borrowers a first home buyer – latest figures

The proportion of first home buyers in NSW fell to its lowest ever level last month with fewer than 1 in 50 new borrowers (1.9%) being first home buyers. First home buyers also fell to their lowest ever level in Victoria and South Australia where they comprised just 7.4% and 6.3% of new borrowers respectively. First home buying increased slightly in Queensland to 5.2% from its all-time low of 4.7% last month, and in WA rose from a low of 17.9% in October to 19.1% in November.

By contrast, investment mortgages continue to be in very strong demand comprising 40.7% of all new mortgages processed nationally. On a state by state basis, home loans for investors comprised 50.9% in NSW, 39.8% in VIC, 35.9% in SA, 34.5% in QLD, and 29.8% in WA. Mark Hewitt, General Manager of Sales and Operations says: ‘We’ve been highlighting the imbalance in the market since the axing of first home buyer grants in several states. Last month was the closest to zero we’ve recorded for NSW, and first home buying is well below its long term trend of around 12% – 15% everywhere except in WA.’

In WA, first home buyers receive a $10k state government grant if they move into a new build property, or $3k if they buy an established property.

Non-major lenders continue to consolidate their position in home loan markets, with a significant increase in their traditional stronghold, the first home buyer market, where the proportion of loans processed for them increased sharply from 30.9% in October to 35.7% in November. During the course of 2014, non-major lenders have grown their overall market share from 24% to 29%.

Last month AFG processed $4.4 billion in home loan finance, down slightly from a record high of $4.7 billion in October, and 11.5% higher than for November 2014.

Figures processed for November were higher by 19.6% on November 2013 figures in NSW, 19.4% in VIC, 18.8% in SA, 5.7% in QLD. WA figures were 5% lower than in November 2013.

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