Mortgage Index – March 2014


AFG, Australia’s largest mortgage broker, processed more mortgages last month than for any February on record – a total of $3.7 billion. After a very strong January, the record-breaking February represents a 27% increase on mortgages processed for February 2013.

However the AFG Mortgage Index also shows that first home buyers comprised less than 10% of all mortgages processed for the first time since June 2010. The national average figure of 9.9% was triggered by a sharp decline in the number of first home buyers in WA, which for years has led the nation in this sector.

The proportion of home loans arranged for first time borrowers in WA fell to 19.5% last month from 24.2% in January. Month-on-month falls in the proportion of first home buyers were also recorded for South Australia (from 15.5% to 13.1%) and Victoria (11.2% to 10.3%). Queensland bucked the trend rising somewhat from 6.5% to 6.9%, while New South Wales remained the lowest in the country on a steady 3.4%.

Mark Hewitt, General Manager of Sales and Operations says: ‘The overall, national figure for first home buyers has for some time concealed the reality that first home buying in NSW and QLD has been at very low levels since state government grants were withdrawn. Now that the WA figure has come off its very high levels, the issues faced by first home buyers are becoming more apparent. There has been some media commentary indicating that the ABS FHB numbers are understated however we disagree with this view. First Home Buyers are included in our data irrespective of whether they qualify for a grant or not and we clearly see a concerning downward trend. AFG’s Mortgage Index reflects fierce competition in the mortgage market, with non-major lenders seizing back market share lost to the majors in January. Non-major lenders made particular inroads among investors, who tend to be the stickiest clients, with their market share in this sector increasing from 19.8% to 24.2% in February.

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