Homebuyers across the country are turning to brokers for help as house prices continue to rise and low availability bites.
Australian Finance Group Ltd (ASX: AFG) brokers lodged more than $24 billion in home loans for the first quarter of FY25, the highest Q1 lodgement volume on record and the highest since the second quarter of 2022.
The AFG Index released today shows Western Australia, South Australia and Queensland recorded their highest lodgement quarter ever, with WA breaking the $3 billion threshold for the first time since the AFG Index has been tracking activity.
AFG Chief Executive Officer David Bailey explained the results: “The continued momentum shows homebuyers are becoming increasingly confident cash rates are at their peak. This quarter’s results are the highest Q1 on record and as we head into the spring selling season, we expect our brokers will again be seeing a lift in demand as borrowers look to secure competitive finance, so they are ready to make their move in a tight housing market.”
First Home Buyers are the only category of buyer to drop this quarter, dropping slightly from 12% to 11%, a sign affordability continues to be challenging.
“With increasing house prices, average loan sizes are also on the rise,” he said. “This could be a result of pre-approvals increasing, as borrowers try to secure the maximum amount they can service in a bid to secure a home in a market restricted by the availability of stock.”
Loan to Value Ratio (LVR) is the lowest on record at 64.3%. “This is the first time LVR has dropped below 65%,” he said. “Once again likely driven by increasing house prices.”
The country’s major lenders saw a drop in market share across all categories of homebuyers apart from First Home Buyers, losing ground to their non-major rivals to finish the quarter at 55.9%. Their lowest level since Q3 2022.” Despite the majors recently announcing a new range of lower fixed rates this does not appear to have tempted home loan customers with the percentage for the quarter still well below long term averages.
“AFG Home Loans has maintained a market share of approximately 7.2%, consistently staying above 7% for the past four quarters,” said Mr Bailey. “Our AFG Securities products continue to drive this growth, with strong credit quality they now account for more than half of the flow. This is further evidence that non-major lenders play a vital role in providing homebuyers with compelling options and a competitive market.”
“This quarter also saw the time from loan submission to unconditional approval drop to 15.2 days, the fastest rate we have seen since we began reporting this timing,” he concluded.
