Mortgage sales climb in August

Staff Reporter

Stabilising property prices are encouraging home buyers back into the market, new data from AFG has found.

According to AFG’s latest monthly Mortgage Index, mortgage sales climbed 10.9 per cent higher in August.

For the second consecutive month, sales to first home buyers also increased – hitting 11.7 per cent from 9.5 per cent in July.

AFG executive director Kevin Matthews said greater competition between lenders on price and policy, and especially the increasing of LVRs, is supporting both entry level home buyers as well as property investors.

“We now have two months of data which show that first home buyers are coming back. The impact of government grants, which had the effect of bringing forward first home buyer demand, seems to have washed through the system. With property prices in many areas having stabilised, and some lenders prepared to lend up to 95 per cent of a property’s value, property is becoming more accessible to first home buyers and more attractive to investors, especially when compared to the volatile performance of stock markets,” Mr Matthews said.

First home buyer activity was particular robust in NSW, where it comprised 15.5 per cent of all new mortgages compared to 11.7 per cent in June.

First home buyers comprised 12.9 per cent of all mortgages in WA, 11.7 per cent in Victoria, 9 per cent in Queensland and 6.7 per cent in South Australia.

New South Wales and Victoria remain the most popular with investors, comprising 36.9 per cent and 36.4 per cent of all mortgages sold in those states respectively.

Investor confidence in WA and Queensland, more popular states with investors during the resource boom years, has been negatively impacted by uncertainty over a possible mining super tax.