Powered by MOMENTUM MEDIA
realestatebusiness logo
Subscribe to our newsletter SIGN UP

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Mortgage size soars, sales fall

03 December 2009 Reporter

The average size of a new mortgage in Australia has climbed to a record high in November, as investors continue to re-enter the market.

According to AFG’s mortgage index, mortgage sizes have been on the rise since the middle of the year, having increased by 6.4 per cent since May.

On a state-by-state basis, Victoria experienced the strongest growth with the average mortgage size up by 12.1 per cent since May, NSW up 10.7 per cent and Western Australia up three per cent.

Despite the surge in mortgage size, AFG’s general manager of sales and operations Mark Hewitt said confidence was still fragile, particularly on the loan sales side.

Advertisement
Advertisement

"While larger average mortgages and greater activity by investors are usually the signs of a confident market, October and November are seasonally strong [sales] months in the calendar but we've seen two straight months of decline,” he said.

Overall sales of new mortgages fell by 8.36 per cent to 6,541 in November, from October, with fewer first home buyers in the market.

First home buyers accounted from 13.7 per cent of new loans arranged in November, compared to a peak of 28.1 per cent in March.

However, property investors continued to re-enter the market, accounting for 33.8 per cent of new mortgages arranged in November – the highest this year – up from a year low of 24.7 per cent in March.

Mr Hewitt said buyers may again be deterred after the Reserve Bank lifted the official interest rate by 25 basis points to 3.75 per cent on Tuesday, following similar moves in October and November.

"In our view, the RBA has gone too far in ratcheting rates back up again," he said.

Mortgage size soars, sales fall
default
lawyersweekly logo
FROM THE WEB
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
Do you have an industry update?
REAL ESTATE BUSINESS NEWSLETTER
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.