Mortgage Index – February 2014


53.4% of all home loans processed in NSW in January were for investors according to AFG, Australia’s largest mortgage broker. This is highest proportion of new mortgages processed for investors in NSW in the six years AFG has been running its monthly Mortgage Index.

The continuing strength of investors in the NSW market supported AFG’s strongest January ever, with the company processing over $2.58 billion of home loans – 14% more than in January 2013. On a monthly basis, volumes processed were lower than in previous months, but the summer holidays traditionally makes January a much quieter month.

Mark Hewitt, General Manager of Sales and Operations says: ‘We’ve had a very strong start to the year, with continuing trends of high investment activity in NSW and robust first home buyer activity in WA. With most people expecting the historically low rates to remain with us for much of the year, we’re preparing for even higher levels of activity now that people are getting back to work from the summer holidays.’

AFG Mortgage Index also shows a jump in the proportion of first home buyers, from 10.2% in December to 11.8% in January. This rise was mainly driven by a resurgence in Victoria, from 8.7% in December to 11.2% in January, as well as a rise in WA, where first home buyers grew from 21.8% in December to 24.2% of all new home loans in January. Elsewhere, the division between states offering grants versus those than don’t remains stark: in SA, first home buyers comprise 15.5% of all buyers, while in QLD this proportion is 6.5% and NSW 3.4%

Major lenders seized back market share from non-majors, who have been making inroads in recent months. The total market share of major lenders moved from 73.6% of home loans in December, to 76.0% in January, with the greatest gains made among investors and first home buyers.

The proportion of borrowers opting for fixed rate loans fell to 23.9% – its lowest level in a year.

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