Non-major lenders and the eastern seaboard are the big winners in AFG’s Mortgage Index
Non-major lenders and the eastern seaboard are the big winners in AFG’s Mortgage Index
Non-major lenders have increased their market share to 34.7% at the expense of the non-majors, AFG’s Mortgage Index for the December Quarter 2016. The proportion of loans written by non-major lenders is now higher than at any time since 2013; as is the size of the increase, a jump of 5.9% over the quarter. Non-major lenders, which AFG defines as all lenders other than the big four, increased their presence across all customer segments, with the biggest increase with first home buyers and refinancers.
AFG’s Mortgage Index, which has been running for 14 years, also looked at where loans are being written. Victoria showed the strongest lodgment growth, at 23% across 2016. It was followed by Queensland, which grew at 18%, and NSW at 10% growth. AFG COO David Bailey described Queensland’s growth as ‘encouraging’, given the “number of years of lacklustre activity” in the state.
“The remainder of the country tells a different story”, warned Bailey: Western Australia saw a 16% drop in lending with lending in South Australia remaining flat. Looking forward, Bailey noted “a recent increase to the First Home Owners Grant and a relaxation in eligibility requirements for Keystart lending is clearly an attempt by the WA state government to help lift the housing market and stimulate the construction sector in that state.”
Average LVRs remain around 69% across 2016, the index found, 0.7% lower than 2015. The average loan value went up in the December quarter, to $488,875, with the overall growth in AFG’s lodgement volumes coming to 9.9%. Growth in the broker channel would continue into 2017, Bailey predicted: “many lenders have been increasing fixed and variable interest rates and have tightened lending to investors. This has encouraged consumers to examine their own situation and we are seeing many pick up the phone to their mortgage broker to determine if their loan is still the most appropriate for their circumstances.”
