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AFG (ASX:AFG) brokers finished the 2021 calendar year on a high, with record volumes revealing residential lodgements were up 24% on the same period last year.
AFG CEO David Bailey said the company lodged $24.6 billion for the three months to December 2021. “AFG brokers have navigated the challenges presented by the latest wave of disruption caused by the pandemic to help their customers secure new homes, upgrade their existing homes or take up opportunities to save by refinancing their
existing home loans.
“Residential lodgement volumes across the final three months of 2021 increased in Victoria, Queensland, South Australia, and Western Australia whilst activity in New South Wales slowed marginally during the quarter.
“The national average mortgage size has increased to $624,000. Pleasingly, the loan to value ratio (LVR) has dropped once again to now be sitting at 68.7%.
When comparing buyer types, investors are up from 21% in the same period last year to 26% in Q2 FY22. Investors’ share of the market has hovered in the range of 20 to 30 per cent across the past four years.
“Refinancers have been active, up from 22% to 25% on the same period last year however down from highs of 27% and 26% through the balance of 2021.
“The percentage of homeowners looking to upgrade their home is climbing once more, with Upgraders now representing 43% of the market. First Home Buyers however have dropped to 13%, down from 22% in the same period last year.
“In a sign of a healthy level of competition, the country’s non-major lenders’ market share is up to 46.5%,” he said.
“Their largest market share was recorded in Q2 FY20 when they reached 46.9%.
“Conversely the Big 4 Banks and their associated brands were down from 57.31% last quarter to 53.55%, their second lowest market share recorded in the past 10 years.
ANZ and the CBA group registered the biggest drops, of 2.02% and 3.36% respectively.
The Westpac Group’s market share lifted from 15% to 15.48%, driven by their subsidiary brands, Bank of Melbourne, Bank SA and St George, whilst Westpac dropped 8.36% to 7.95% for the quarter. NAB was up from 10.69% to 11.83%.
“Increases amongst the non-majors were evenly shared however Beyond Bank doubled from 0.23% to 0.45%, ING went from 3.28% to 3.92% and Macquarie jumped from 9.17% to 10.49%.
Lender turnaround times for full approval have stabilised at 21.8 days for the past two quarters.
“Australian home buyers’ brief romance with fixed rate products, fueled by the short-term funding advantages provided to the ADIs, appears to be waning with the number of people choosing to fix their interest rates falling from 38.2% in the prior quarter to 34% for Q2 FY22.
“With brokers now writing two-thirds of all home loans in Australia these results clearly demonstrate the value of the channel to homebuyers,” he said. “By driving competition between lenders and providing a vital distribution network for lenders without branches, brokers deliver options for consumers. And consumers clearly value that choice.”
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