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First home buyer activity is continuing to drive strong mortgage sales for brokers but increasingly tight lending criteria could hit volumes AFG warns.
AFG revealed a record $800 million written in first home buyer business in March with total sales reaching $3.1 billion.
But Mark Hewitt, AFG general manager of sales and operations, said the boom masked growing evidence of credit tightening by the major lenders which could lead to a decline in loans written.
“The truth is that we’re seeing a big reduction in the proportion of loans that are approved and eventually settle.
"Once the boost to the first home buyer grants ends in June, we face the possibility of a bleak mortgage winter.”
Mr Hewitt said the major lenders had benefited from generous government support and should do their part by providing access to credit on reasonable terms.
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