Mortgage demand softens

By webmaster

The threat of further rate hikes has cooled buyer demand.

According to the latest AFG Mortgage Index, mortgage sales declined by 3.7 per cent in July, suggesting home buyers have officially retreated into their shells in an attempt to ride out the current economic woes.

Month-on-month mortgage sales fell most in Victoria, by 7.4 per cent, with declines also recorded in New South Wales (5.9 per cent), Western Australia (5.0 per cent) and Queensland (0.5 per cent).

Only South Australia recorded an increase, but off a much lower base, of 13.7 per cent.

The most active part of the mortgage market remains refinancing, with two out of every five new mortgages arranged to refinance an existing home loan. By contrast, the proportion of owner occupiers arranging mortgages to move or upgrade their homes was just 11.7 per cent of all mortgage sales.

AFG’s general manager of sales and operations Mark Hewitt said the figures show Australians are worried about their financial future.

“Ever since the interest rate rise last November, home buyers have gone into their shells. Western Australia, supposedly the prime beneficiary of a resources boom has the most depressed property market of all. Domestic financial news is dominated by talk of rate rises and the carbon tax. Gloomy international financial news has seen stock markets slump. We’re all looking for strong economic leadership to provide the market with some much needed confidence,” he said.

In Western Australia, total mortgage sales for the first six months of 2011 were 3 per cent lower than for the last six of 2010.

Major banks continue to dominate the lender market, with 81.7 per cent of all new home loans arranged by the four major banks, including the subsidiary brands they own.

Mortgage demand softens
SPI logo
Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
BLUE BAY 49.18%