There are signs that property buyers are slowly getting back into the market as shown by the higher mortgage sales data from a leading mortgage broker.

The Australian Finance Group said sales climbed by 17% to $2.4bn in July, compared to a month ago thanks to a record number of refinancing customers. On an annual basis, sales dropped by 14.1% reflecting poor sentiment in the sector. However, Malcolm Watkins, executive director of AFG, pointed out that this figure suggests a bottoming out of the market, particularly when compared with the 22% decline in June and a hefty 28% fall in May based on a year-on-year comparison. 

AFG said 40.8% of all new mortgages were taken for refinancing purposes while 30% were for property investments.

Borrowers opting for fixed rate loans fell to a new low amid expectations of interest rate cuts by the RBA. In June, only 7.9% chose to take fixed rate loans compared with 44.8% taking up standard variable loans.

"Consumer confidence is at an all time low, although in recent days, there has been encouraging signs with the lower crude oil prices and the prospect of an RBA rate cut in the not too distant future," said Watkins. "However, consumers will only benefit if these savings are passed on."

Watkins pointed out that the official RBA rate may no longer be the benchmark for home loan pricing, rather competitive tension will determine delivery rates to borrowers.

"Only robust competition between lenders will ensure that borrowers benefit. The Big Five banks now account for a far greater share of the market, compared to a year ago. We'd like to see the government act quickly to stimulate genuine competition in the sector."