November mortgage figures released by mortgage broker AFG show a resurgence in loans taken out by property investors as part of an overall jump in processed mortgage applications following the RBA cutting interest rates on November 2.
The figures, which come out about six weeks ahead of official ABS housing finance data and are strongly indicative of where the market is heading, show an 18.4% increase in mortgages processed by AFG brokers.
Property investors accounting for almost two out of every five mortgages sold in November (38.4%) – an all-time record for the AFG Mortgage Index.
Investors were especially active in New South Wales (44.6%) and Victoria (39.8%), but also strong in Queensland (37.7%), Western Australia (32.1%) and South Australia (30.0%).
Refinancing activity remained virtually unchanged, accounting for 37.8% of all loans written.
First-home buyers dropping to 15.8% of the market compared to 16.4% recorded in October, but are still well above the 12.2% recorded in November 2010.
AFG, whose mortgage brokers account for about one in 10 mortgages written in Australia, processed $2.9 billion of mortgages in November, its highest such figure since March 2009.
Mortgage growth was particularly strong in Victoria, where mortgages processed leaped 26.7% and Queensland (20.8%). Elsewhere, growth was recorded in NSW (16.4%), WA (15.8%) and SA (8.7%).
Mark Hewitt, general manager of sales and operations at AFG, says that while November is seasonally a strong month for mortgages, “the rate cut has certainly stimulated demand”.
“We’re experiencing the paradox that weaker global economic conditions and lower rates, is good news for Australian property buyers – at least for now. It’s significant that investors and first home buyers are leading the action,” he says.
“Many had been fearful that we were locked into a scenario of constant rate hikes. The November rate cut proved to be a real a turning point and the outlook is very different now.”
The major banks accounted for 80.4% of all mortgages written by AFG brokers, up from 78.9% written in October.