This article is from the Australian Property Journal archive
MORTGAGE sales have fallen by 15.6% in April as home buyers grow uncertain about future interest rates rises.
According to the AFG Mortgage Index, $2.3 billion was arranged in April down from $2.7 billion in March. This figure is also 17.5% lower than the $2.8 billion arranged in April 2009.
New South Wales saw the largest decline of 19.9% from March sales, with Queensland falling 16.4%, South Australia 15.9%, Western Australia 14% and Victoria the most robust with an 8.7% fall.
“Every month we go through this “will they or won’t they” raise interest rates debate. It’s hard for ordinary families to make the huge financial decision to buy a property when they don’t know what repayments will be in three months time, let alone next year,” AFG sales and operations general manager Mark Hewitt said.
“Investors are somewhat more insulated. They may have the option of rent rises or negative gearing to protect them. This is why we’re seeing the emergence of a two tier mortgage market,” he added.
AFG’s data shows property investors accounted for 36.9% of all mortgages arranged in April, the highest figure ever recorded. This compares with 10.2% for first home buyers and 16.3% for up-graders. The balance of new mortgages in April, 36.6%, were arranged for refinancing purposes.
AFG Mortgage Index shows that Loan to Value Ratios, the value of a home loan expressed as a percentage of the value of a property, was 63.3% in April, compared with 73.7% in April 2009. This reflects the growing proportion of relatively well-funded investors as well as the decline of first home buyers over the past 12 months.
Australian Property Journal
