June 18, 2011
Australian Finance Group (AFG) has released data stating that investors are responsible for an unexpected 18.8 percent hike in mortgage sales in May. The figures also revealed that investment buyers accounted for 36.5 percent of the market in the same period.
Investor-driven AFG mortgage sales increased from $2,119m in April (5,489 loans) to $2,517m in May (6,483 loans). For the same period last year, the figures were April ($2,329m) and May ($2,561m). General manager of sales and operations Mark Hewitt says the average loan amount increased to $388,000, compared to $386,000 in May 2010.
Mr Hewitt believes the upswing will continue for the foreseeable future. “We think there will be a gradual increase in property investment over the next few months,” he said.
“As property prices have continued to fall, particularly in WA and Queensland, yields rise and investors are starting to see value. Typically, these investors are older, say 45-plus. They are usually financially secure people with equity in their home.”
AFG’s researchers also found that non-major lenders increased their market share in May, totalling 19.6% of all mortgages, with 22.9 percent of first home buyers opting for a home loan product from a non-bank lender. Hewitt acknowledged that May was traditionally a strong month in the housing market before the winter lull, but says the increase still points towards surprising growth.
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