Mortgage Index July 2014


Investor activity is heating up in Queensland as it comes off unprecedented levels in NSW, according to AFG, Australia’s largest mortgage broker. AFG’s latest Mortgage Index, published today, shows that the proportion of mortgages arranged for investors rose from 33.5% in January to 38.7% in June in QLD. During the same period, investor loans in NSW declined from a peak of 53.4% in January to 45.9% in June. The June figure for NSW still leads the nation, with QLD next.

Elsewhere, VIC continues to enjoy solid investor support, with 36.6% of all home loans in June for investors. SA finished the year slightly higher on 35.5% and WA recorded 33.0% for investor loans in June.

AFG processed a total volume of $3,794 million in home loans last month – 23% more than in June 2013. The June figure was 10% lower than for May, following the usual seasonal pattern.

Mark Hewitt, General Manager of Sales and Operations says: ‘Overall it’s been a great financial year for AFG – we processed almost $44 billion in home loans, which is 24% more than in the last financial year. In NSW, investors have accounted for more than 2 out of every 5 home loans each month for the past two and a half years. What we’re seeing now is a resurgence in QLD as investors step up activity there. In both cases it should also be noted that the proportion of first home buyers are at very low levels compared with the rest of the country.’

The proportion of first home buyers in NSW last month was 3.4%, compared with 5.6% for QLD, 11.3% for VIC, 12.9% for SA and 23.1% for WA.

The average mortgage size rose from $401k in July 2013 to $433k by the end of June 2014 – a 7.9% increase. The biggest rise was in QLD (from $344k to $373k – an 8.4% increase), followed by VIC (from $388k to $419k – up 7.9%), NSW (from $494k to $526k – up 6.4%), SA (from $322k to $335k – up 4.0%) and WA (from $408k to $424k – up 3.9%).

Loan to Value Ratios (LVRs) the value of a loan expressed as a percentage of the value of a property, fell during the financial year from 68.4% in July 2013 to 66.6% in June 2014. This trend is in line with the decline in first home buying (from 11.6% of all loans in July 2013 to 10.8% last month), with upgraders and investors using equity from existing properties to finance new purchases.

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