Last year’s spate of rate hikes had a significant effect on home financing, new research has found.
According to Australian Finance Group’s Mortgage Index, total mortgage sales fell by 10 per cent in 2010 compared to 2009.
Just over $27 billion of mortgages were processed in 2010 compared with $30 billion the year before.
Queensland suffered the greatest contraction in activity, with total mortgage sales down 23.6 per cent for the year.
South Australia was not far behind, suffering a 22.9 per cent drop in activity, while Western Australia dipped 13.7 per cent.
Victoria bucked the downwards trend, recording 6.6 per cent growth.
AFG’s general manager sales and operation Mark Hewitt said 2010 had been a very challenging year.
“It is ironic that the resource states were the worst performers in residential property last year – for a while, the housing market almost froze. But the data we’ve been seeing since November suggests the return of cautious optimism. While the floods in Queensland will be a setback, we are starting to see a greater level of activity returning to the market in general. This is being aided by increasing competition from the non major lenders,” Mr Hewitt said.