Victoria worst-performing state as mortgage sales fall nationwide: AFG

The value of mortgages sold via AFG mortgage brokers declined by 3.7% in July, with Victoria the worst-performing state, recording a decline of 7.4%.

In total AFG brokers sold $2.29 billion worth of mortgages in July, compared with $2.38 billion in June.

Significant declines were also recorded in NSW (down 5.9%) and Western Australia (down 5%), with Queensland almost flat (down 0.5%). The only state to go up was South Australia, rising by 13.7%, but off a much lower base.

Nearly two out of every five new mortgages (39.1%) arranged by AFG in July was to refinance an existing mortgage, with only 11.7% of mortgages arranged for owner occupiers moving or upgrading their homes. 

Just over a third of mortgages (35.6%) were arranged for investors, but this number is down from the 36.2% recorded in June. 

First-home buyer numbers increased marginally from 12.9% to 13.6% but are still down on the 14.1% recorded in January.

Mark Hewitt, general manager of sales and operations at AFG, says the latest figures confirm a much more worrying trend: that most Australians are still fearful about their financial future. 

“Ever since the interest rate rise last November, home buyers have gone into their shells. Western Australia, supposedly the prime beneficiary of a resources boom, has the most depressed property market of all.” 

In Western Australia, total mortgage sales for the first six months of 2011 were 3% lower than for the last six of 2010, with investor interest lagging behind the national average (30.7% compared with 35.6%). The average loan in WA size for July fell to $371,-000 – exactly the same as the average loan processed four years ago in July 2007. 

“Domestic financial news is dominated by talk of rate rises and the carbon tax. Gloomy international financial news has seen stock markets slump. We’re all looking for strong economic leadership to provide the market with some much-needed confidence,” Hewitt says. 

The average size of a mortgage arranged by an AFG broker rose marginally to just over $386,000 in July nationally, and to $456,000 in Sydney.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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