In NSW, mortgage lending rose 25 percent, in Victoria 19 percent, in each of Qld and SA 17 percent, and WA 2 percent in the last quarter of 2019. The rise is due to improved lending conditions and increased investor confidence by top mortgage brokers. During the quarter, the broker network reported reports they handled $15.4 billion in home loan applications 19 percent more than they did in 2018 for the same period.
First home buyers accounted for 15 percent of mortgages during the period – remaining at the highest level since 2013. David Bailey, Australian Finance Group’s chief executive, says interest rate cuts and rate buffer easing, which tests the willingness of borrowers to make repayments if interest rates rise, have attracted borrowers back into the market.
The outcome of the Federal Election and the absence of obstacles to improvements in negative gearing for property investors have helped improve market sentiment. “It’s very clear that buyers have been enticed back to the market and the data is showing us that there is an incontestable trend away from the major banks. Consumers are empowered by the enhanced competition in the home loan sector generated by mortgage brokers and are reaping the benefits through greater choice and lower prices,” says Mr. Bailey.
Non-major banks in the September quarter represented 47 percent of loan applications, the highest since 2007. More than half of the loans taken from property investors were secured by non-major banks for the first time, while first home buyers traditionally strong supporters of the majors also voted with their feet with a record 36 percent of loans arranged with a non-major bank. For the final quarter of 2019, the average mortgage size was $539,000 compared to $508,000 for the same period in 2018.