NATIONAL

MORTGAGE MARKETS STAGNATE ON CONSUMER FEARS

Only 11.7% of mortgages for owner occupiers: July data
4 August 2011
Australias mortgage sales declined by 3.7% in July, as consumers remain fearful about
the threat of further rate hikes, taxes and global economic worries, according to AFG,
Australias largest mortgage broker. The AFG Mortgage Index shows that month on
month mortgage sales fell most in Victoria, by 7.4%, with declines also recorded in New
South Wales (5.9%), Western Australia (5.0%) and Queensland (0.5%). Only South
Australia recorded an increase, but off a much lower base, of 13.7%.
The most active part of the mortgage market remains refinancing, with two out of every
five new mortgages (39.1%) 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% of all mortgage sales.
Mark Hewitt, General Manager of Sales and Operations says: These figures confirm a
much more worrying trend: that most Australians are still fearful 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. Were all looking for strong economic leadership to provide the
market with some much needed confidence.
In Western Australia, total mortgage sales for the first 6 months of 2011 were 3% lower
than for the last 6 of 2010, investor interest lags behind the national average (30.7%
compared to 35.6%), and the average loan size for July fell to $371k exactly the
same as the average loan processed 4 years ago in July 2007.
Major banks continue to dominate the lender market, with 81.7% of all new home loans
arranged by the four major banks, including the subsidiary brands they own.
Fixed rate mortgages comprised 7.9% of all loans arranged in July, compared to 75.0%
of loans which were basic or standard variable. Introductory loans fell to 8.5%, the
lowest such figure all year, in keeping with the overall decline in first home buyer
numbers.

Figures for each state are available at: www.afgonline.com.au:Corporate - News.

ENDS
CONTACT DETAILS:
Mark Hewitt, General Manager Sales & Operations
Australian Finance Group Ltd
David Michie:
Mosaic Reputation Management

Tel: 08 9420 7888

Mob: 0411 453 404

AFG - First with the Figures

AFG MORTGAGES SOLD
TABLE 1: ALL AUSTRALIA

MONTH
May 10
June 10
July 10
Aug 10
Sep 10
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mar 11
Apr 11
May 11
June 11
July 11

TOTAL
NUMBER
6,624
6,159
5,698
6,269
6,157
5,891
6,619
5,472
3,583
5,365
6,436
5,489
6,483
6,205
5,937

TOTAL
AMOUNT
$2,561 m
$2,323 m
$2,111 m
$2,343 m
$2,335 m
$2,234 m
$2,511 m
$2,076 m
$1,310 m
$2,053 m
$2,513 m
$2,119 m
$2,517 m
$2,382 m
$2,293 m

AVERAGE
SIZE
$386k
$377k
$370k
$373k
$379k
$380k
$379k
$379k
$365k
$382k
$390k
$386k
$388k
$384k
$386k

PROPERTY
INVESTORS
36.7%
35.4%
33.6%
34.3%
34.5%
35.4%
35.1%
35.5%
34.7%
33.9%
34.7%
34.9%
36.5%
36.2%
35.6%

FIRST TIME
BUYERS
9.9%
9.5%
11.1%
11.7%
12.6%
11.8%
12.2%
11.4%
14.1%
14.6%
13.9%
13.9%
13.2%
12.9%
13.6%

%
REFINANCE
38.0%
39.0%
39.4%
38.3%
36.8%
37.8%
38.5%
41.5%
36.1%
37.0%
36.9%
36.7%
36.8%
39.2%
39.1%

MAJOR VS NON MAJOR LENDER MARKET SHARE

TABLE 2: BY BUYER TYPE

TOTAL MORTGAGES
MONTH

MAJOR

2010 07
2010 08
2010 09
2010 10
2010 11
2010 12
2011 01
2011 02
2011 03
2011 04
2011 05
2011 06
2011 07

83.5%
82.4%
81.6%
80.6%
80.6%
81.1%
80.7%
79.4%
81.7%
82.4%
80.4%
82.1%
81.7%

Majors
=
Non-Majors =

NONMAJOR
16.6%
17.6%
18.4%
19.4%
19.4%
18.9%
19.3%
20.6%
18.3%
17.6%
19.6%
17.9%
18.3%

REFINANCE
MAJOR
82.7%
80.3%
79.3%
77.1%
77.3%
78.7%
77.5%
74.5%
79.0%
80.5%
78.7%
78.7%
79.8%

NONMAJOR
17.3%
19.7%
20.7%
22.9%
22.7%
21.3%
22.5%
25.6%
20.9%
19.5%
21.3%
21.3%
20.2%

FIRST HOME
BUYERS
NONMAJOR
MAJOR
80.1%
19.9%
79.4%
20.6%
75.8%
24.2%
74.6%
25.4%
77.6%
22.5%
79.0%
20.9%
77.1%
22.9%
75.0%
24.9%
79.7%
20.3%
77.3%
22.8%
77.1%
22.9%
76.2%
23.8%
77.6%
22.5%

INVESTORS
MAJOR
84.1%
84.3%
83.8%
83.7%
82.9%
82.4%
82.2%
81.6%
82.2%
83.3%
83.0%
82.9%
83.0%

NONMAJOR
15.9%
15.7%
16.2%
16.3%
17.1%
17.6%
17.8%
18.4%
17.8%
16.7%
17.0%
17.0%
17.0%

Four major banks including the brands they own

All other lenders

AVERAGE MORTGAGE SIZE IN DOLLARS

TABLE 3: STATE BY STATE
MONTH
2010 04
2010 05
2010 06
2010 07
2010 08
2010 09
2010 10
2010 11
2010 12
2011 01
2011 02
2011 03
2011 04
2011 05
2011 06
2011 07

AUSTRALIA
378,814
386,632
377,233
370,505
373,750
379,374
380,027
379,385
379,444
365,799
382,725
390,479
386,218
388,384
384,042
386,382

NSW
432,435
452,240
455,649
428,943
433,378
454,325
442,743
434,898
432,540
416,527
451,630
467,034
453,492
453,286
455,559
456,388

QLD
348,285
368,809
346,234
335,850
341,353
318,556
354,651
354,220
344,485
319,554
354,012
357,177
357,453
354,886
347,506
360,034

SA
304,489
303,342
303,212
288,165
305,536
300,754
315,306
305,978
324,070
301,933
321,672
309,931
315,692
302,057
294,092
318,695

VIC
355,865
349,963
353,886
356,642
360,431
354,673
359,271
359,343
370,978
349,155
346,465
360,051
363,724
379,993
362,063
388,360

WA
412,126
411,972
386,513
393,134
391,397
398,064
393,479
395,325
396,047
397,102
394,922
396,572
404,714
399,372
412,557
371,500

NT
346,745
369,483
337,167
358,630
332,643
318,556
307,661
338,145
339,641
329,902
360,971
376,348
326,205
383,786
347,725
355,855

WA
60.4%
59.3%
62.2%
61.4%
61.6%
63.7%
64.1%
63.6%
66.8%
65.9%
65.0%
65.1%
63.8%
65.2%
66.5%

NT
63.0%
60.0%
56.4%
60.6%
59.7%
59.0%
64.2%
68.7%
66.2%
78.2%
63.1%
56.8%
66.1%
61.0%
66.0%

LOAN VALUE RATIOS

(Loan stated as % of property value)
TABLE 4: STATE BY STATE

2010 05
2010 06
2010 07
2010 08
2010 09
2010 10
2010 11
2010 12
2011 01
2011 02
2011 03
2011 04
2011 05
2011 06
2011 07

AUSTRALIA
63.2%
61.6%
62.4%
63.0%
63.0%
64.5%
64.2%
65.9%
65.4%
68.8%
65.8%
63.9%
65.5%
64.2%
66.3%

NSW
66.4%
65.5%
64.9%
67.0%
64.9%
67.5%
65.1%
66.2%
66.5%
69.2%
66.8%
65.4%
66.2%
64.4%
68.7%

QLD
62.2%
61.4%
62.4%
62.4%
63.3%
65.5%
64.2%
65.1%
62.8%
66.5%
65.2%
65.4%
66.0%
66.0%
66.3%

SA
62.2%
60.3%
63.6%
62.3%
63.5%
64.9%
62.1%
65.5%
62.2%
66.5%
67.2%
64.9%
64.8%
63.4%
65.0%

VIC
64.8%
63.2%
65.1%
64.1%
64.9%
66.3%
65.5%
66.1%
67.7%
66.5%
67.5%
65.8%
66.0%
65.3%
65.5%

LOAN TYPE
TABLE 5: ALL AUSTRALIA
MONTH
June 10
July 10
Aug 10
Sep 10
Oct 10
Nov 10
Dec 10
Jan 11
Feb 11
Mar 11
Apr 11
May 11
June 11
July 11

BASIC
VARIABLE
17.5%
16.9%
16.8%
16.7%
16.2%
15.0%
13.7%
14.6%
14.2%
11.8%
10.6%
11.7%
10.6%
13.2%

EQUITY

FIXED

11.1%
10.6%
10.2%
9.0%
10.4%
9.5%
9.0%
7.7%
9.7%
9.3%
9.7%
8.9%
9.3%
8.6%

3.9%
3.4%
3.9%
5.4%
6.3%
9.0%
12.6%
9.0%
6.6%
6.6%
6.4%
8.4%
8.2%
7.9%

INTRO
7.1%
7.5%
8.2%
7.5%
6.9%
7.4%
8.9%
11.9%
13.2%
15.6%
14.3%
12.5%
11.5%
8.5%

STANDARD
VARIABLE
60.4%
61.6%
60.8%
61.4%
60.0%
59.1%
55.7%
56.7%
56.2%
56.6%
58.9%
58.5%
60.4%
61.8%

DEFINITIONS:
1. Standard Variable: includes the full range of features available.
2. Basic Variable: without some features, lower fees and rates.
3. Intro: also known as honeymoon where the borrower is offered a very cheap initial rate (fixed
or variable) before the loan reverts to a Standard Variable.
4. Fixed: interest rate is fixed for a nominated period before it reverts to a Standard Variable.
5. Equity: also known as line of credit allows the borrower to draw out money up to a specified
limit. Generally more expensive than Standard Variable loans.

Note to Editors
AFG is Australias largest mortgage broker. Established in 1994, the company now provides more than 20% of
brokers nationwide with access to Australias leading lending institutions, and has a mortgage book in excess of
$65 billion.