Australian Finance Group (AFG) has announced another successful quarter for home loan applications, with lodgements breaking their previous record after reporting a substantial annual gain of 34.32%.
Brokers at AFG lodged $20.6bn in home applications over the third quarter of financial year 2021.
"Record low interest rates, effective government stimulus packages and an improving consumer outlook have contributed to increased activity," said David Bailey, CEO of AFG.
In regional terms, AFG brokers reported the highest gain in lodgements in New South Wales, where home loan applications grew by 9.37% quarterly and 40% annually. Lodgements in Victoria also posted substantial gains of 6.6% quarterly and 24,86% annually.
"Historically, Q3 usually records slower growth than Q2 so the solid results in NSW and Victoria are even more impressive," Bailey said.
Lodgements also increased quarterly in South Australia (1.51%) and Northern Territory (5.79%). In Western Australia, mortgage applications declined by 7.61% from the preceding quarter, coming off from its strongest period since 2015.
Over the period, the national average loan-to-value ratio (LVR) has declined from 73.3% to 71.9%. Meanwhile, the average loan size has increased by 5.9% to $574,948.
"Rising house prices are outpacing loan sizes and maintaining safety buffers, as reflected in the reducing LVRs," Bailey said.
There was also an increase in the number of applications for fixed mortgage loans, with its share rising from 29.3% to 34%. Interest-only lodgements also increased up from 12% to 14%.
Another interesting change was with first-home buyers. Activity from this segment has slowed from 22% to 18%. This, however, is still relatively high.
"The state and federal government First Home Buyer incentive schemes have done their job and likely pulled forward some demand," Bailey said.
On the other hand, investors are returning, with applications increasing from 21% to 23%. This, however, is still lower than the long-term average share of the market at 35%.
The lender turnaround times also reflect the competitive market and increased activity.
"Lender turnaround times continue to rise, up from 25.2 days last quarter to 27.1 days. This is the highest it has been at any point over the last three years," Bailey said.
“As our country recovers from the disruption of the pandemic, a resilient housing market built on sound lending standards will help keep Australia’s recovery ahead of many of the world’s economies.