This article is from the Australian Property Journal archive
RESIENTIAL property investors are flocking back to the market, according to Australia’s largest mortgage broker AFG.
The AFG Mortgage Index in February shows that 34.1% of all mortgages arranged were for investors – the highest such percentage the company has ever recorded, and a 25% increase on the level of investment loans just six months ago, in August 2009.
The proportions of mortgages arranged for investors were particularly high in New South Wales (38.5%), Victoria (37.2%) and South Australia (37.6%). They were lowest in Western Australia (29.9%) and Queensland (29.5%), although even these figures represent robust levels of investment activity.
AFG’s general manager of sales and operations Mark Hewitt said investor confidence has rising for several months.
“But we hadn’t been expecting a figure for February as strong as this one. Investors are now the driving force of the market, encouraged by rising property prices in recent months, and the longer term view that a housing shortfall will continue to underpin future price growth as well as rental yields,” he added.
Meanwhile first Home Buyers continue to leave the market, with the proportion of loans arranged for this group falling to 11.3% in February.
The only state where this trend was reversed somewhat is NSW which has seen the level of first home buyers increase in the past two months from 14.9% in December to 16.2% last month. But even this figure is about half the volume of first home buyers recorded a year ago.
AFG data also shows the market share of second tier lenders is continuing to strengthen. Last month the ABS reported that bank lending edged back to 88.1% of all loans in the fourth quarter of 2009 down from a high point of 92.5% in the first quarter of the year.
In February AFG’s own data showed bank lending reduced to 83%, with second tier lenders accounting for 17% of all new loans – more than double the proportion compared to the same period last year.
Australian Property Journal
