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Staff Reporter
It seems the Reserve Bank's decision to cut the official cash rate had a positive impact on Australia's borrowers, with the number of mortgages processed in November surging 18.4 per cent.
New data from mortgage broker aggregator AFG - which said it's responsible for around 10 per cent of mortgages settled in Australia - found over $2.9 billion of mortgages were processed in November – the highest such figure since March 2009.
Growth was particularly strong in Victoria, where mortgages processed leaped 26.7 per cent and Queensland with 20.8 per cent growth.
Mark Hewitt, general manager of sales and operations at AFG said while November is seasonally a strong month for mortgages, the rate cut certainly stimulated demand.
"We're experiencing the paradox that weaker global economic conditions and lower rates, is good news for Australian property buyers – at least for now. It's significant that investors and first home buyers are leading the action," he said.
"Many had been fearful that we were locked into a scenario of constant rate hikes. The November rate cut proved to be a real a turning point and the outlook is very different now."
The jump in activity may continue into early 2012, with 13 of 25 economists surveyed by Bloomberg confident the RBA will make a follow-up cut to interest rates tomorrow, when it's next due to make a decision.
AFG said property investors accounted for almost two out of every five mortgages sold in November – an all time record for the AFG Mortgage Index, which goes back six years.
Investors were especially active in New South Wales (44.6 per cent) and Victoria (39.8 per cent).
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