After two months of subdued home loan activity, mortgage brokers are starting to see buyer confidence return.
According to AFG’s latest Mortgage Index, mortgage sales recovered in March, stepping up from the historic lows achieved in January.
AFG processed $2,513 million of home loans in March – up 22 per cent on the February figure of $2,053 million, but still 8.9 per cent lower than the $2,760 million arranged in March 2010.
New South Wales bucked the national trend, recording exactly the same figure for mortgage sales in March 2011 as March 2010. Elsewhere South Australia saw a slight year on year softening, while Western Australia experienced a 10.9 per cent drop in activity.
Queensland recorded the biggest fall in activity, with mortgage sales plummeting 15.7 per cent in the year to March 2011.
But despite the drop in activity, AFG general manager sales and operations Mark Hewitt said there was evidence to suggest mortgage sales would now return to more normal levels.
“The RBA holding off further rate rises has given some sense of normality, and while the lender wars haven’t encouraged many people to switch, at least there is now a feeling that lenders are trying to be competitive,” he said.
“In our view, last month’s banning of exit fees will have little, if any positive effect on the market in the short term, and will certainly hurt non-major lenders going forward. What’s needed, right now, is a strong dose of economic confidence.”
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