AFG posts March mortgage record
Perth-based AFG, the nation's biggest mortgage broker, says it processed a record $5.2 billion in mortgages last month covering 11,235 home loans.
It was the company's biggest month in its 21-year history.
The figure represents a massive 29 per cent increase on the same month last year and was driven by soaring property investment activity in Sydney and Melbourne.
AFG said volumes were particularly strong in New South Wales which recorded a 47 per cent increase on March 2014 ($1.9 billion processed) and Victoria, where 30 per cent greater volumes were processed ($1.2 billion).
Increases reported for other states were South Australia (23 per cent), Queensland (16 per cent) and WA (11 per cent).
Property investment nudged to a new record high of 41.7 per cent, driven by particularly strong activity in New South Wales, where 52.9 per cent of all mortgages were processed for investors.
This investor loan figure compares with 37.7 per cent in SA, 36.7 per cent in Victoria, 33.6 per cent in WA and 33.3 per cent in Qld.
Fixed rate loans comprised 14.2 per cent of the mortgage mix, with 68.8 per cent of borrowers opting for standard variable loans, reflecting the growing expectation that interest rates will be cut again and may stay lower for longer.
AFG sales and operations manager Mark Hewitt said the March figures reflected the stories of property activity in Sydney and Melbourne.
"Volumes in other cities were strong but unspectacular," he said.
"The combination of rate expectations, with a traditionally buoyant month for property sales, made March a stand-out month."
Loan to value ratios (LVRs), loans stated as a proportion of the value of a property, remained steady at 67 per cent nationally, relatively lower in NSW (64 per cent) than in Vic and WA (71 per cent in both cases) on account of the typically higher levels of equity provided by investors seeking loans.
First home buying continues at very low levels - 7.4 per cent nationally - especially low in NSW where first home buyers comprised just 2.4 per cent of new borrowers, SA (4.6 per cent) and Qld (5 per cent).
AFG has approximately 10 per cent of Australia's total mortgage market.
