Two out of five loans for investment, says AFG

Australia’s largest mortgage broker processed $4.2 billion in mortgages last month, the first month on record that AFG has processed two out of every five new home loans for investors. 

The $4.2 billion figure is 17 per cent higher than for May 2013, and four per cent above the previous record volume of $4.0 billion processed by AFG in October 2013.

“Despite the fall in consumer confidence caused by the recent federal Budget, low and stable interest rates are a key factor in encouraging borrowers to participate in the real estate market,” AFG director Kevin Matthews said.

“Recent independent research shows that one in two borrowers are now using mortgage brokers, which no doubt also contributed to our record result,” Mr Mathews said.

Investment volumes in NSW were the highest in the country in May, at 49 per cent.

Close to half of all mortgages written in NSW over the past year have been for investment purposes, according to AFG.

Investor demand also accounted for 40 per cent of all new home loans in Victoria last month – the highest figure recorded by AFG in the state.

Queensland has also seen a steady rise in investor activity during the past three months, from 32 per cent of all new home loans in February to 39 per cent in May.

Investor activity accounted for 34 per cent of mortgage volumes in South Australia and 31 per cent in Western Australia last month.