Latest AFG Mortgage Index shows further drop in investor and refinance activity
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Latest AFG Mortgage Index shows further drop in investor and refinance activity
The number of refinancers has fallen for the fifth consecutive quarter, AFG’s Mortgage Index has shown.
The December quarter saw refinancing and investing lose out to upgraders, which now make up 44% of the market.
“Whilst tightened lending criteria continues to impact the market, particularly with respect to refinancers, our overall volumes compared to prior year remain strong,” commented AFG CEO David Bailey. “Refinancers now represent just 22% of the market. Investors have also been caught in the cross-hairs and have dropped to 28%.”
Refinancing has almost halved since peaking at 39% of the market in early 2017.
Back in October, Bailey had warned its decline was connected to restrictions on investor lending: “This is also likely to be a reflection of the lack of lending options on the table for investors wanting to refinance, as lenders pull back from the investor market to meet regulator demands,”
Reaction to 2017
Another explanation for the decline in refinancing is that prospective refinancers have already been heavily targeted by brokers.
After APRA, ASIC and the banks moved against interest-only borrowers early last year, many brokers proactively refinanced clients to avoid steep rate hikes.
Leading Top 100 Broker Peter Ellis, who runs Century 21 Home Loans in Sydney, told MPA in November that refinancing made up a larger part of their business than new purchases.
Although interest-only borrowers had been targeted, other groups were treated better, Ellis explained: “there have been some really good offers for [principal and interest] owner-occupiers from some of the smaller lenders.”
Continued rise of non-majors
AFG’s Mortgage Index also revealed that the non-majors continued to gain ground, to a post-GFC high of 35.8% of the market.
Non-majors were particularly active in the refinancing space, at 42.3% of the market, and weaker in the first home buyer market, at just 30.4%.
MPA’s Brokers on Banks survey last year saw two non-majors make the top five – Suncorp in fourth and Bankwest and 5th, at the expense of NAB in 6th.
The number of refinancers has fallen for the fifth consecutive quarter, AFG’s Mortgage Index has shown.
The December quarter saw refinancing and investing lose out to upgraders, which now make up 44% of the market.
“Whilst tightened lending criteria continues to impact the market, particularly with respect to refinancers, our overall volumes compared to prior year remain strong,” commented AFG CEO David Bailey. “Refinancers now represent just 22% of the market. Investors have also been caught in the cross-hairs and have dropped to 28%.”
Refinancing has almost halved since peaking at 39% of the market in early 2017.
Back in October, Bailey had warned its decline was connected to restrictions on investor lending: “This is also likely to be a reflection of the lack of lending options on the table for investors wanting to refinance, as lenders pull back from the investor market to meet regulator demands,”
Reaction to 2017
Another explanation for the decline in refinancing is that prospective refinancers have already been heavily targeted by brokers.
After APRA, ASIC and the banks moved against interest-only borrowers early last year, many brokers proactively refinanced clients to avoid steep rate hikes.
Leading Top 100 Broker Peter Ellis, who runs Century 21 Home Loans in Sydney, told MPA in November that refinancing made up a larger part of their business than new purchases.
Although interest-only borrowers had been targeted, other groups were treated better, Ellis explained: “there have been some really good offers for [principal and interest] owner-occupiers from some of the smaller lenders.”
Continued rise of non-majors
AFG’s Mortgage Index also revealed that the non-majors continued to gain ground, to a post-GFC high of 35.8% of the market.
Non-majors were particularly active in the refinancing space, at 42.3% of the market, and weaker in the first home buyer market, at just 30.4%.
MPA’s Brokers on Banks survey last year saw two non-majors make the top five – Suncorp in fourth and Bankwest and 5th, at the expense of NAB in 6th.
