Mortgage Index – February 2012

MASSIVE SWING BACK FOR JANUARY MORTGAGE FIGURES, BUT BORROWERS PLAY WAIT AND SEE ON RATES

Mortgage sales for January were much higher than in the same month last year, when floods in Queensland, and other natural disasters impacted sales, according to AFG, Australia’s largest mortgage broker. AFG Mortgage Index shows that overall national mortgage sales increased by 40% this January, compared to last, marking a return to more normal trading levels. Sales in Queensland were up 80.6% and in South Australia 84.5%, with other states showing significant uplifts compared to January 2010 – WA (+ 37.4%), Vic (+25%), NSW (+14.5%).

January also saw WA take over from NSW as the most popular state for First Home Buyers.

Almost one in five new mortgages (19.1%) in WA was arranged for First Home Buyers compared to 14.0% in NSW. Through the second half of last year, NSW led the country as the most active First Home Buyers market.

However NSW retains its position as the most popular state for investment, with 40.2% of loans there arranged for investment purposes, compared to 36.8% in Victoria, 34.9% in Queensland, 32.6% in Western Australia and 32.0% in South Australia.

Mark Hewitt, General Manager of Sales and Operations says: ‘While markets across the country have recovered from last year’s natural disasters, right now we have a strong sense that borrowers are playing wait and see on rates. Will the RBA cut rates, and if so, how much of this will be passed on by lenders? It seems that we are moving to a new paradigm where there is less and less linkage between the cash rate and mortgage rates. An RBA cash rate cut will not automatically translate into improved consumer confidence.’

The AFG Mortgage Index also shows that nearly one in five new borrowers (18.6%) opted for a fixed rate home loan. This figure is close to the high water mark of 20.4% for fixed rate products recorded last October.

Download – February Mortgage Index – National

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