Login
ISCOVER
Steven Cross
The overall volume of loans processed for borrowers decreased by 22.4 per cent in April, according to AFG's latest Mortgage Index.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
The report found the volume of loans processsed fell from $2.9 billion in March to $2.2 billion in April 2012.
According to AFG, April is traditionally a quieter month for borrowers because of Easter and school holidays. But, in the context of the previous much stronger two months, the weaker than expected April data exposed the vulnerability of the home loan market.
“For some months we've been signalling the fragility of the home loan market, and April saw even more potential borrowers adopting a wait and see position. There has been so much negative commentary that a confidence boosting RBA rate cut had become urgently needed. Lenders must pass on a meaningful proportion of this cut if they wish to see demand for home loans improve significantly," AFG general manager sales and operations Mark Hewitt said.
One in five new loans in April were fixed-rate loans, showing signs of consumer nervousness and concern about the future of rates.
Average loan size fell by $17,000 from $400,000 down to $383,000, the lowest since February 2011.
