April mortgage sales for aggregation group Australian Finance Group (AFG) could reflect a significant slowdown in overall home loan growth.
According to AFG’s latest Mortgage Index, mortgage sales rose 9.65 per cent month on month compared to March but were down 6.6 per cent compared to April 2007.
Mark Hewitt, AFG general manager of sales and operations, believes that after many years of double digit growth, the April results coupled with analysts’ predictions highlight a slowing of the home loan industry.
“Many analysts are predicting that for only the third time in 20 years home loan growth will be below ten per cent. We believe that there will be minimal or possibly no growth in home loan lending for the balance of 2008,” Mr Hewitt said.
The index also revealed that sales of fixed rate loans, which have comprised at least 23 per cent of all new mortgages since October last year, declined significantly in April from 24 to 18.4 per cent.
While Mr Hewitt cautioned against reading too much into the results of just one month he said that if the trend continued it would show that home loan buyers believe that the rate rise cycle has peaked.
Refinancing also fell from 39.3 per cent of the group’s total new mortgages in March to 35.9 per cent in April.
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