Aggregator reveals record-breaking lodgements

In the three months to December 2020, AFG brokers also lodged a record number of home loans, writing 36,583 loans in the quarter.

According to AFG’s Index, the average loan size written by brokers was therefore at its highest level in Q2FY21,  hitting a record high of $544,359.

Speaking of the $19.9 billion record, AFG chief executive David Bailey, said: “The national figure represents an increase of 9.5 per cent on the first quarter of the 2021 financial year and an increase of 30 per cent on the corresponding quarter last year.”

According to Mr Bailey, the increase can be partly attributed to movement restrictions, as a result of COVID-19.

“With travel off the agenda for many, the home has become even more important and 42 per cent of lodgements were for those upgrading their homes,” he noted.

More than a fifth (22 per cent) of lodgements were for those entering the property market for the first time, as record low-interest rates, government incentives and a strong savings trend acted as a calling card for first home buyers.

Mr Bailey also noted that Q2FY21 had seen a record high loan-to-value ratio of 73 per cent. He attributed this to the “high proportion of first home buyers who typically have smaller deposits”.

While owner-occupiers were out in force in the last three months of 2020, the percentage of investor loans has remained at a record low of 21 per cent. 

According to the data, standard variable rate home loans (59.7 per cent) were the top product type for the second quarter of 2021, although fixed-rate home loans in Q2 (29.2 per cent) have spiked since 2020, as “the market is well aware that low interest rates are likely bottoming out,” Mr Bailey said.

“Low interest rates on offer has also meant that homeowners are taking the opportunity to pay down their debt faster with a record 88 per cent choosing a principal & interest product over an Interest Only loan,” Mr Bailey noted. 

Looking at the states, the AFG Index showed that gains were up across the country, with Mr Bailey outlining that NSW was up 3.5 per cent for the quarter, Queensland was up 7.8 per cent, South Australia rose 0.4 per cent, Victoria gained 18 per cent and Western Australia recording a 13.3 per cent jump on Q1 2021.

Only the Northern Territory recorded a drop, of around 10 per cent, in the quarter.

Loan value ratios were significantly higher in NT (77 per cent) compared to its corresponding year (66.8 per cent), with Western Australia (76 per cent), Queensland (73.3 per cent), Victoria (72.5 per cent), South Australia (71.5 per cent), and NSW (69.3 per cent) following.

The record lodgements at AFG reflect a broader trend across Australia. Recent statistics from the Australian Bureau of Statistics showed that the value of mortgage approvals across Australia swelled to a new record high in November last year, surpassing $24 billion. Moreover, the NSW Land Registry recently found that newly originated mortgages in the state were up 25 per cent in December 2020, reaching the largest net gain in more than 24 months.

However, more recent data from CoreLogic showed that there has been a marked drop-off in mortgage activity in the past few weeks, as auctions tapered off during the holiday period.

[Related: COVID accelerates home ownership intentions]