Despite the increase in new home sales, overall mortgage sales fell by almost 10 per cent last month, according to Australia's largest mortgage aggregator AFG.
AFG’s latest monthly mortgage report found the aggregator processed $2.1 billion in mortgages in April 2010, compared to $2.3 billion in April 2010.
Month on month figures showed an even larger fall of 15.6 per cent - but this drop in volume also reflects the impact of the extended Easter and Anzac public holidays.
On a volume per business day basis, April was somewhat higher ($117 million) than March ($111 million), but both these figures are well below those recorded in previous years.
AFG’s general manager of sales and operations Mark Hewitt said falling property prices, rising interest rates, the increasing cost of living and the fear of a carbon tax were a toxic combination to consumer confidence.
“As people start to see their net worth eroding because of falling home and investment property values, they become even less likely to spend. The government needs to address this problem in its forthcoming budget, and provide a circuit breaker to restore confidence among consumers that the underlying fundamentals of our economy are still strong,” Mr Hewitt said.
New South Wales was the most popular with first home buyers, who comprised 17.3 per cent of all mortgages processed in the state – well above the national average of 13.9 per cent. It was also second highest in popularity with property investors who accounted for 37.5 per cent of all new mortgages processed – the most popular investment market being Victoria, where 38.4 per cent of mortgages were processed for investors.
Fixed rate home loans remained steady, comprising 6.4 per cent of the product mix, reflecting consumer caution at locking in rates over the long term.