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Investor activity has reached record levels, according to AFG’s latest monthly statistics.
The aggregator announced that it processed $4 billion of loans in March, with $1.6 billion of those being mortgages taken out by investors.
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AFG said the corresponding percentage figure of 39.6 per cent made this the highest proportion of investor activity in the seven years the company had been reporting mortgage data.
Investors accounted for 49 per cent of all new home loans in NSW, 37 per cent in Queensland and Victoria, and 32 per cent in South Australia and Western Australia.
AFG’s general manager of sales and operations, Mark Hewitt, said investors had been driving the market for most of the past 12 months.
“The vast majority of these are mum and dad investors taking advantage of the equity in their existing properties and the low rate environment to build their property portfolio,” he said.
“The fact that fixed-rate loans are now less popular than they have been for most of the past year suggests that borrowers are also less concerned about the prospect of potential rate rises.”
Fixed-rate loans comprised 23.9 per cent of all mortgages, down from 25 per cent in February and a peak of 30.7 per cent in April 2013.
Loan-to-value ratios remained steady at 68 per cent, a level that has been maintained for much of the past year.
AFG is estimated to hold 11 per cent of Australia’s mortgage market.
