ASX-listed aggregator AFG has recorded a 16% increase in the total value of home loans processed in the September quarter, compared to the same period last year, as borrowers flock to brokers in an increasingly complex market.
AFG processed a total value of $14.2 billion worth of home loans over quarter to September. AFG managing director Brett McKeon says its performance was boosted by the changing lending market driving consumers, in particular owner-occupiers, to brokers.
“A key driver of the strong result was activity from upgraders – owner occupiers changing properties. In the June quarter 28% of the loans we processed were for homeowners making a move but this lifted to 34% for the September quarter. This activity is consistent with the traditional spring buying season which is now well underway,” he said.
“With continued low interest rates and lender policy changes being made around investment and interest only lending, many borrowers are aware the market is changing and are seeking the help of an informed, professional broker.”
In line with APRA restrictions, however, lending to property investors for the quarter to September was down from a three-year average of 38% of total loans processed, to 33%.
But the pricing and policy changes made by the majors saw the non-majors regain 2 % in market share in the investor space over the quarter, a further indication that borrowers are seeking a broker’s help.
“We have noticed in the latter part of the quarter that the percentage of our business comprised of investment lending stabilized at 32 – 33% so it appears that the last round of changes have now flowed through the system” McKeon said.
The share of fixed rate home loans also dropped over the quarter, hitting its lowest level for more than three years at 11.3%, as some commentators predict further rate cuts.