Mortgage Index – January 2013


The volume of mortgages arranged increased by 15% in 2012 over 2011 according to AFG, Australia’s largest mortgage broker. AFG’s Mortgage Index, published today, shows that the total volume of mortgages arranged by the aggregator was $32 billion, compared to $28 billion the year before. AFG has approximately 10% the total national mortgage market (Source: ABS and AFG data). AFG’s 15% increase may be in part due to improved market share as well as overall market growth.

Figures for December show that the mortgage market is becoming a tale of two seaboards with investors dominating the NSW and QLD markets. Home loans for investors comprised 46.3% and 35.9% of all home loans arranged in the two states respectively. The reason for this was that the average long term share of home loans arranged for First Home Buyers, usually between 12% – 15%, collapsed to just 4.2% in NSW and 4.5% in QLD during the last two months of 2012, after first home buyers grants were withdrawn in both states (except for new housing).

Meantime in WA, First Home Buyers comprised 23.2% of all new home loans in December, while investors took up 30.5% of mortgages. Strong migration, escalating rents, improving property values and low interest rates are encouraging many onto the WA property ladder.

Mark Hewitt, General Manager of Sales and Operations says: ‘As we enter a new year, the mortgage market is in need of two dynamics: more competition and greater consumer confidence. It is still the case that just four institutions account for nearly nine out of every ten mortgages arranged in Australia. That level of concentration doesn’t serve consumers well. It’s also pretty well established that despite strong employment levels, low interest rates and greater savings, many people simply don’t feel sufficiently confident in our economy to buy their first home, upgrade or invest. This is particularly the case for first time buyers of established housing and more needs to be done to encourage younger people into buying their first home.’

Fixed home loans fell to 18.7% from 21.6% of new mortgages in December as the majority of borrowers see the likely future trend of interest rates as going down.

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