Investor lending has tumbled by almost 10% for ASX-listed mortgage group, Australian Finance Group (AFG).
According to AFG’s Mortgage Index, investor lending has fallen from 40% of total loans in the first quarter of the 2015 calendar year to 31% of total loans processed in the quarter ending December.
This has not impacted the overall result for the group, however, with strong gains in refinancing and upgrading resulting in a 7% lift to $13.8 billion in loans processed by AFG for the December quarter compared to the same lending period in 2014.
Refinancing increased 2% to 38% of total loans processed over the year while upgrading increased 5% to 35% of total loans processed by the group in 2015.
The gains were led by upward swings in Victoria of 17.69% and New South Wales at 12.23% with a surge in South Australia of 13.41%. These positive results offset a flat market in Queensland at 0.85%, and a decline in the Northern Territory (-21.7%), in a comparatively smaller market. Western Australia dipped 9.55% reflecting a cooling housing market in that state.
AFG’s general manager sales and operations, Mark Hewitt said he wasn’t surprised by the results of the final quarter of 2015.
“2015 was a year of adjustment for both borrowers and lenders. A shift in requirements for lenders set down by regulators saw many changes to lending policy and interest rates resulting in a level of confusion amongst borrowers,” he said.
“This has made the role of the broker even more important for Australians looking to buy homes.”
As the market becomes more and more complex, consumers have also decided to play it safe and switch to a fixed rate.
According to the Mortgage Index, fixed rate lending lifted by nearly 3% to 14.2% of the product mix. This figure, as a percentage of AFG’s overall volume saw its first increase since the final quarter of 2013.