Australian Property News

Record-breaking January for mortgage sales

Posted on Monday, February 04 2013 at 3:19 PM

Investors are coming out in force again, with mortgage broker company Australian Finance Group (AFG) processing more home loans last month than any January before.

The AFG mortgage index shows the company processed $2.2 billion of home loans, a massive 24 per cent more than in January 2012.

Not surprisingly, the strongest demand was from two of the strongest states at the moment, Western Australia ($583 million) and New South Wales ($569 million).

General manager of sales and operations Mark Hewitt says loans are being established for first homebuyers, upgraders and investors.

“Borrowers seem to be responding to the combination of a more positive, global economic outlook, lower rates and enhanced affordability,” he says.

Fixed rate loans fell to their lowest level since August 2011, comprising 16.3 per cent of all new home loans.

General manager of products and marketing for CUA, Jason Murray, says CUA also had a great month in January, with about 80 per cent of borrowers choosing variable loans.

“We’ve had a better month than any proceeding January,” he says.

“Those who are lending for residential mortgages as opposed to investment purposes, that still hasn’t changed,” he says.

“It’s the investment space that has seen the biggest impact. If interest rates continue to come down, it does become a very desirable place to start going back into that investment space. The press coming out of Sydney reflects prices are now going up, and Brisbane has now probably reached the bottom. The housing market is starting to show signs of recovery.”

EPS Property Search buyers’ agent Patrick Bright says November, December and January were all strong months and he’s definitely fielding more enquiries.

He adds some clients have been sitting on the sidelines for months but have finally decided 2013 is the year they’d like to buy.

“It does appear the market (in Sydney) has bottomed out,” he says.

“It seems it’s not going to get any more affordable. It’s a combination of vendors becoming more realistic about their asking price and buyers getting on with it.”

Bright says many clients ask him whether or not the market could drop further.

While no one has a crystal ball, Bright warns if it has bottomed out, those who wait will probably be forced to pay more in 12 months.

“If it hasn’t bottomed out, in six to 12 months, they’ll just pay the same, so investors need to make a decision. I don’t tell clients when they must or must not invest. They have to come to that conclusion. But now the feeling is that the market is on the improve.”