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ISCOVER
Staff Reporter
The property market may be soft, but business opportunities abound for brokers, with one brokerage processing a record number of loans for July.
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Yesterday, AFG announced it had processed more home loans last month than for any July since pre-GFC.
The latest AFG Mortgage Index shows that the company processed $2.7 billion of mortgages in July – a 20 per cent increase on July 2011.
According to the data, the strong figures were driven by first home buyers, whose market share leapt from 15.6 per cent of all mortgages arranged in June to 17.3 per cent in July.
This is the highest figure for first home buyers since August 2010.
First home buyers were strongest in Western Australia, where they represented almost a quarter of all new mortgages arranged, and were also well represented in Victoria, with 21.7 per cent of all mortgages written for first home buyers.
They were less in evidence in NSW, with first home buyers accounting for 14.4 per cent of all mortgages written.
Similarly, in South Australia and Queensland, first home buyers accounted for 9.6 per cent and 13.8 per cent respectively.
Consistent with the increase of first home buyers, the proportion of introductory loans spiked from 2.9 per cent in June to 5.4 per cent in July.
In addition, overall LVRs – loans as a proportion of home values - increased slightly from 66.9 per cent to 67.7 per cent as would be expected given that first home buyers typically borrow most of the value of their new property.
AFG’s general manager of sales and operations Mark Hewitt said low interest rates, soft property prices and escalating rents create a powerful cocktail of incentives to get people into the property market.
“This is especially true in WA, where these factors are probably at their strongest,” he said.
