Uncertainty in the economy has resulted in low mortgage sales, with AFG recording its lowest monthly sales figure since 2004.
According to the aggregator’s January Mortgage Index, just $1.3 billion worth of mortgages was processed last month – 40 per cent below the monthly figure recorded during 2010.
Queensland was the worst affected state, with only around half (48.9 per cent) the number of mortgages that were processed in December.
The news was not much better in Victoria and NSW, with month on month sales down by 39.6 per cent and 31.8 per cent respectively.
AFG executive director Kevin Matthews said while the Queensland floods had dealt a significant blow to the local property market, the disaster has also affected sentiment across the whole country.
“In times of national crisis, people hunker down and put off major buying decisions,” Mr Matthews said.
“Additionally, consumer confidence is being adversely affected by the huge discrepancies between so-called experts on where property markets are heading. Some tell us real estate is over-valued by up to 40 per cent. Others are telling us we’ve hit the bottom and should expect prices to pick up. All of this is undermining the confidence of potential buyers.”
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