Homebuyers turn to brokers as house prices continue to climb
Australian Finance Group (AFG) brokers lodged more than $24 billion in home loans in the first quarter of financial year 2025, marking the highest first-quarter lodgement volume on record and the highest since the second quarter of 2022.
The latest AFG Index shows that Western Australia, South Australia, and Queensland recorded their highest-ever quarterly lodgement figures, with Western Australia surpassing the $3 billion mark for the first time since the aggregator began tracking these metrics.
AFG chief executive officer David Bailey (pictured) attributed the strong results to increased confidence that cash rates have peaked.
“As we head into the spring selling season, we expect our brokers will again see a lift in demand as borrowers look to secure competitive finance in a tight housing market,” he said.
While overall loan activity increased, first-home buyers saw a slight decline, dropping from 12% to 11% of the market, indicating ongoing affordability challenges for this group.
“With increasing house prices, average loan sizes are also on the rise,” Bailey said, noting that borrowers may be pushing to maximise their pre-approvals to secure homes in a market constrained by limited stock.
The loan-to-value ratio (LVR) reached a record low of 64.3% this quarter, the first time it has fallen below 65%. Bailey suggested that rising house prices are likely driving this trend.
Meanwhile, major lenders lost market share in all buyer categories except first-home buyers, finishing the quarter at 55.9%, their lowest level since the third quarter of 2022. Despite recently announcing lower fixed rates, major banks have not seen a significant increase in home loan customers, with market share remaining well below long-term averages.
AFG Home Loans maintained a market share of 7.2%, a level it has sustained for the past four quarters. Bailey highlighted the role of non-major lenders, particularly AFG Securities products, in driving this growth.
The quarter also saw the time from loan submission to unconditional approval decrease to 15.2 days, the fastest rate recorded since AFG began reporting on this metric.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
