Record-breaking January for mortgage sales

Record-breaking January for mortgage sales

Posted on Monday, February 04 2013 at 3:19 PM

Investors are coming out in force again, with mortgage broker company Australian Finance Group (AFG) processing more home loans last month than any January before.

The AFG mortgage
index shows the company processed $2.2 billion of home loans, a massive 24 per
cent more than in January 2012.

Not surprisingly,
the strongest demand was from two of the strongest states at the moment, Western
Australia ($583 million) and New South Wales ($569 million).

General manager
of sales and operations Mark Hewitt says loans are being established for first
homebuyers, upgraders and investors.

“Borrowers seem
to be responding to the combination of a more positive, global economic
outlook, lower rates and enhanced affordability,” he says.

Fixed rate loans
fell to their lowest level since August 2011, comprising 16.3 per cent of all
new home loans.

General manager
of products and marketing for CUA, Jason Murray, says CUA also had a great
month in January, with about 80 per cent of borrowers choosing variable loans.

“We’ve had a
better month than any proceeding January,” he says.

“Those who are
lending for residential mortgages as opposed to investment purposes, that still
hasn’t changed,” he says.

“It’s the
investment space that has seen the biggest impact. If interest rates continue
to come down, it does become a very desirable place to start going back into
that investment space. The press coming out of Sydney reflects prices are now
going up, and Brisbane has now probably reached the bottom. The housing market
is starting to show signs of recovery.”

EPS Property
Search buyers’ agent Patrick Bright says November, December and January were
all strong months and he’s definitely fielding more enquiries.

He adds some
clients have been sitting on the sidelines for months but have finally decided
2013 is the year they’d like to buy.

“It does appear
the market (in Sydney) has bottomed out,” he says.

“It seems it’s
not going to get any more affordable. It’s a combination of vendors becoming more
realistic about their asking price and buyers getting on with it.”

Bright says many
clients ask him whether or not the market could drop further.

While no one has
a crystal ball, Bright warns if it has bottomed out, those who wait will
probably be forced to pay more in 12 months.

“If it hasn’t
bottomed out, in six to 12 months, they’ll just pay the same, so investors need
to make a decision. I don’t tell clients when they must or must not invest.
They have to come to that conclusion. But now the feeling is that the market is
on the improve.”

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