The latest data from mortgage broker AFG suggests that investors might be starting to leave the market.

The AFG Mortgage Index shows the company processed a record high number of home loans in October - over 10,000 worth a total of $4.7 billion.

This was an increase of 9% over the previous all-time high in September and was 17% higher than in October 2013.

However, the amount of mortgages for investors dropped both nationally – from 40.3% in October to 38.7% - and in every state.

  • South Australia recorded the biggest fall, with a decline in investor loans from 36.4% to 30.5%.
  • In New South Wales, investor loans eased from 49.7% to 48.7%.
  • In Queensland, investor loans dropped from 34.9% to 32.0%.
  • In Victoria, investor loans declined from 37.2% to 35.9%.
  • In Western Australia, investor loans fell from 32.2% to 30.2%.
AFG’s Mark Hewitt said there had been an increase in loans to owner occupiers in response to the arrival of the spring buying season.

In his view, it was the fall in first home buyer loans – which are now at “unprecedented lows” in some states, notably NSW (2.2%) – that was of particular concern.

Nationally, the number of first home buyer loans fell from September’s record low of 8.4% to just 7.2%.

“If this continues we are going to end up with a whole generation of renters,” Hewitt said.

The index also indicated that there has been a drop in the major lenders’ share of the market.

In October they accounted for 71.7% of the mortgages processed by AFG. This was the smallest share recorded for some time.