Trade-up buyers re-enter mortgage market: AFG

Staff Reporter Thursday, 3 Sep 2009 1 minute read

Property owners looking to up-grade their family homes are returning to the market after six months of relative inactivity, the latest AFG Mortgage Index has revealed.

According to the index, trade-up buyers accounted for 22.8 per cent of all mortgages sold in August, rising from 14.3 per cent six months ago.

Loan to value ratios (LVRs) eased slightly in August from 67 per cent to 66.3 per cent – a further indication that people are moving into their second or third homes as they tend to borrow proportionally less than first home buyers.

“The reemergence of trade-up buyers is a further encouraging sign that markets are beginning to normalise. Having said that, we’re not out of the woods yet,” AFG general manager of sales and operations Mark Hewitt said.

According to Mr Hewitt, the banks still have a firm grip on residential lending, accounting for 89.1 per cent of all mortgages sold.

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