Investors dominate the mortgage market

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Strong investor demand continues to govern the home loan market. 

The latest AFG Mortgage Index shows that investment home loans now comprise 40% of all new home loans nationally.

On a state by state basis, home loans for investors also took up the lion’s share of the market. 

•    In New South Wales investor loans came to 50.9%;
•    In Victoria they were 39.8%;
•    In South Australia they comprised 35.9%;
•    In Queensland they were 34.5%; and 
•    In Western Australia they amounted to 29.8%.

In contrast, the index shows that the proportion of first home buyer loans fell to their lowest ever levels in New South Wales (1.9%), Victoria (7.4%) and South Australia (6.3%) last month. 

The New South Wales figure means that fewer than 1 in 50 of the new borrowers processed were first home buyers.

However, in Queensland the proportion of first home buyers rose to 5.2% from an all-time low of 4.7% last month, which in Western Australia they increased to 19.1% in November.

AFG general manager of sales and operations Mark Hewitt said there has been an imbalance in the market since the axing of first home buyer grants in several states. 

“Last month was the closest to zero we’ve recorded for New South Wales. First home buying is well below its long term trend of around 12% - 15% everywhere except Western Australia.”

In Western Australia, first home buyers receive a $10,000 state government grant if they move into a new build property, or $3,000 if they buy an established property.

Hewitt added that last month AFG processed $4.4 billion in home loan finance.

This figure was down slightly from a record high of $4.7 billion in October, but 11.5% higher than for November 2013.


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