Mortgage sales up 40% in January year-on-year: AFG

By Larry Schlesinger
Friday, 03 February 2012

AFG mortgage brokers arranged 4,736 home loans worth a combined $1.8 billion in January 2012, a 40% increase on January 2011, when brokers wrote 3,583 worth $1.3 billion.

The aggregator says the January result marked a return to more normal trading levels after January 2011 was affected by the Queensland floods and other natural disasters.

Not surprisingly, one of the biggest jumps in mortgage sales was recorded in Queensland, where brokers wrote 80.6% more mortgages in January 2012 than January 2011.

The top performer was South Australian, where sales increased by 84.5% compared to a year ago.

There were also significant uplifts in WA (+ 37.4%), Victoria (+25%) and NSW (+14.5%).

In January WA also took over from NSW as the most popular state for first-home buyers, with almost one in five new mortgages (19.1%) in WA arranged for first-home buyers compared with 14% in NSW.

NSW retained its position as the most popular state for property investors, with 40.2% of loans arranged for investment purposes, compared to 36.8% in Victoria, 34.9% in Queensland, 32.6% in Western Australia and 32.0% in South Australia.

Major banks recovered some of the market share they lost in December, writing 79% of all mortgages in January, compared with 76% in December. A year ago major banks wrote 81% of all AFG mortgages.

Mark Hewitt, general manager of sales and operations, says: ‘While markets across the country have recovered from last year’s natural disasters, right now we have a strong sense that borrowers are playing wait and see on rates.

“Will the RBA cut rates, and if so, how much of this will be passed on by lenders?

“It seems that we are moving to a new paradigm where there is less and less linkage between the cash rate and mortgage rates. An RBA cash rate cut will not automatically translate into improved consumer confidence."

The AFG Mortgage Index also shows that nearly one in five new borrowers (18.6%) opted for a fixed-rate home loan. This figure is close to the high water mark of 20.4% for fixed-rate products recorded last October.