The AFG Mortgage Index – a monthly report by Australia’s largest mortgage broker – has shown demand for new mortgages in Victoria is outstripping all other states.
The report showed that AFG processed over $1.09 billion in loans in Victoria for the month of July – the first time it had ever surpassed the billion mark in that state – as well as recording a 44 per cent year-on-year increase for loans in that state.
The demand for home loans in Victoria for the month of July was led by borrowers to invest (34.9 per cent), refinance (34.4 per cent) and upgrade (21.1 per cent). Only 9.6 per cent of new loans were for FHBs.
The AFG report showed that, year on year, demand for loans had increased in all states. Western Australia was up 21.2 per cent from this time last year, NSW 12.8 per cent, Queensland 11.6 per cent and South Australia 3.7 per cent.
AFG’s general manager of sales and operations, Mark Hewitt, said the Victorian results were particularly pleasing as the state traditionally eschewed the third-party channel when it came to financing properties.
“With increasing competitiveness and complexity in the mortgage market, we are seeing a marked shift in borrowers using brokers to help them find the best deal,” Mr Hewitt said. “The resilience of the Victorian market, defying concerns about high-rise oversupply, is another factor underpinning mortgage demand there.”
Interestingly, the AFG results showed the average loan size in Victoria had shot up month on month by $50,000 to just shy of $470,000. It had remained static or fallen in every other state.
The LVR on the average AFG loan nationwide was 68.2 per cent for the month of July, which may go some way to allaying fears borrowers could find themselves in trouble if rates were to rise; although the LVR is typically skewed by investors who traditionally have bigger deposits when borrowing.