Mortgage Index – May 2014


The proportion of property investors in QLD surged last month to comprise 38% of all new home loans processed in the state – up from 32% in February this year according to AFG, Australia’s largest mortgage broker. The AFG Mortgage Index, published today, shows that investor activity in QLD is now ahead of that of VIC, on 37%, SA, on 33% and WA on 32%. Investor activity was second only to NSW, which still leads the nation with 47% of all new mortgages arranged for investors.

National Loan to Value Ratios (LVRs), the value of a loan expressed as a percentage of a property value, fell significantly from 68.0% in March to 66.7% in April. The shift was especially strong in QLD, where LVRs fell from 68% to 65%. This trend is in keeping with the growth of investment buyers, who typically use equity in existing properties to support their new purchases.

Mark Hewitt, General Manager of Sales and Operations says: ‘Investor activity does seem to be gathering pace in Queensland. That said, the very low numbers of first home buyers, both in New South Wales and Queensland, makes investor activity seem proportionally higher than in states like Western Australia where there is a more even mix in borrower types. Helping first home buyers get on the ladder should be a much more urgent priority for the Governments of both New South Wales and Queensland.’

First home buyers, as a proportion of all borrowers, varied significantly in April from 22% in WA to 14% in SA, 11% in VIC, 5% in QLD and 3% in NSW. First home buying activity slumped from mid-teen levels in both NSW and QLD when state grants were removed in Sept and October 2012 respectively.

Major lenders continued to win back business from non-majors in April, comprising 75.2% of all new home loans – up from 73.1% in February. They made particular inroads in the first home buyer market, where they attracted 72.2%, compared to 68.4% in March.

Overall mortgage volumes processed fell 9% from March to April on account of the series of public holidays at the end of last month.

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