Average mortgage size hits new high: Pete Wargent

Average mortgage size hits new high: Pete Wargent
Average mortgage size hits new high: Pete Wargent
Australia's largest mortgage aggregator Australian Finance Group (AFG) reported in its Mortgage Index that year-on-year total quarterly mortgage volumes increased by +8 percent to a record $15.19 billion.
 
The index is not seasonally adjusted. 

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Average mortgage size hits new high: Pete Wargent

Since the standard variable home loan rate fell below 7 percent in Australia in the September 2012 quarter, the average mortgage size has increased by +$90,000 or +23 percent. 

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Average mortgage size hits new high: Pete Wargent

 
Investor market share ticked back to 32 percent in the quarter - well down from the 2015 peak of 40 per cent - in part due to more restrictive lending criteria, combined with widespread fears of an apartment oversupply. 

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Average mortgage size hits new high: Pete Wargent

According to AFG the lift in mortgage volumes was largely driven by homeowners looking to save, with refinancers accounting for 38 percent of activity, up from 36 percent in the prior year comparative quarter. AFG noted that home loans are widely available from below 4 percent. 

State versus state

At the state level the average mortgage size hit new highs in New South Wales ($597,656) and Queensland ($400,566). South Australia also notched a fresh high average mortgage size of $379,405. Elsewhere average mortgage sizes were either at or below previous peaks. 

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Average mortgage size hits new high: Pete Wargent

 

Quarterly mortgage lodgement volumes hit record highs in each of the three most populous states plus South Australia, offset by declines in Western Australia and the Northern Territory. 
 
Average mortgage size hits new high: Pete Wargent
 
Victoria continues to defy gloomy predictions with heady levels of buyer activity, while Queensland also recorded an very large year-on-year uplift, even after accounting for possible shifts in AFG's market share. 

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Average mortgage size hits new high: Pete Wargent


The wrap 

The AFG figures are always well worth a read given their materiality.

The headline result was very strong, but it does need to be recognised that a significant volume of mortgage finance presently relates to refinancing in the prevailing low interest rate environment.

These data suggest to me that interstate buyers are likely to see better results in Queensland than elsewhere, at least initially (for the right property type, at any rate, which does not mean high-rise apartments). The economy of Western Australia remains in recession, and as a result Perth may not come on to the radar of interstate buyers until 2018. 
 

PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.

His latest book is Four Green Houses and a Red Hotel.

Pete Wargent

Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

Tags: 
Mortgage Size Mortgage Volume

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