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One of Australia’s largest mortgage groups has seen a significant increase in lodgements from Victoria, Queensland and NSW over the final quarter of 2016.
AFG this week released the AFG Mortgage Index, which shows year-on-year growth in lodgement volume for the company of 9.9 per cent.
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AFG chief operating officer David Bailey said 2016 saw the eastern seaboard lead the way with Victoria recording an increase of 23 per cent for the year.
“After a number of years of lacklustre activity, it has been encouraging to see Queensland record 18 per cent growth across the 12 months. Continued growth was also evident in NSW with a 10 per cent increase in lodgements for the year,” Mr Bailey said.
However, he noted that the remainder of the country tells a very different story.
The Index shows that South Australia remained flat across 2016 while Western Australia lodgements fell 16 per cent for the year. The Northern Territory also showed a drop of 18 per cent across the year.
“A recent increase to the First Home Owners Grant and a relaxation in eligibility requirements for Keystart lending is clearly an attempt by the Western Australia state government to help lift the housing market and stimulate the construction sector in that state,” Mr Bailey said.
“Loan-to-value ratio (LVR) remained relatively consistent across the 12-month period at 69 per cent,” he said.
“The national LVR for the final quarter of 2016 was 0.7 per cent lower than the same period in 2015, which is good news as this means owner equity has improved.
Historically, the national LVR has been sitting within the 69 per cent range across 2015 and 2016.
“As highlighted in the most recent AFG Competition Index, non-major lenders have been taking market share from the majors. “The major banks dropped market share across all sectors of the market in the final quarter of 2016,” said Mr Bailey.
With many lenders increasing fixed and variable interest rates and tightening lending to investors, Mr Bailey says consumers have been encouraged to examine their own situation.
“We are seeing many pick up the phone to their mortgage broker to determine if their loan is still the most appropriate for their circumstances,” he said.
“We expect this trend to continue into the new calendar year as an increasing number of consumers recognise that a mortgage broker is in the unique position of being able to provide a comprehensive view of the alternatives available across lenders and products.”
[Related: White-label mortgages dominating the market]
