Mortgage loans hit historic high

Comparethemarket.com.au analysed AFG’s December Quarter Mortgage Index and found that in the second quarter of this financial year the average loan size nationally grew to $500,446. Over the last five years, the average loan size has grown 26 per cent in total, up from $396,445 in the second quarter of the 2013 financial year.

Comparethemarket.com.au spokesperson Abigail Koch said the results are illuminating.

“Household debt levels are already at alarmingly high rates,” she said. 

“And with the average loan size growing to over $500,000, this indicates that Aussies are willing to take on deeper levels of debt.

Ms Koch said there are no surprises in the drivers behind the growth.

“Residents in our nation’s most populous states – NSW and Victoria – are responsible for this growth, with NSW residents recording an average mortgage loan of $613,084 last quarter,” she said.

“This is considerably higher than the rest of the nation and the only state above half a million. In Victoria, the average loan size sat at $496,815.”

FHB’s return

AFG mortgage data reveals that first home buyers have been coming back into the market over the last 12 months, with their share of loans remaining in the double digits since the third quarter of FY17.

Ms Koch said that last quarter they represented 13 per cent of the total volume borrowed.

She also said that the last time first home buyers had a double digit share of home loans was back in the first quarter of FY14 – at 10 per cent.

“It’s a welcome trend that first home buyers are getting back into the market after a lull over the last few years.

“This indicates that the stamp duty concessions introduced in July last year may be having their desired effect, along with the plethora of affordably priced apartments that have recently come to market.”  

The data also shows that investor and refinancer loans are down, for the fifth consecutive quarter, to 28 per cent and 22 per cent respectively. And, that for the third consecutive quarter, upgrader loans have increased and now make up 44 per cent of the market.