Sales of mortgages across Australia staged a spectacular and unexpected recovery on the previous month's poor showing, according to the latest data from Australian Finance Group (AFG).
Despite the instability in the financial markets during September, total sales surged by 10.2% led by a massive jump recorded in the Queensland (up 17.9%) and NSW (up 16.1%) month-on-month growth.
The proportion of property investors continued to rise as they took advantage of the available investment opportunities. About a third (31.37%) of the borrowers were investors, while 39.1% were refinancing.
“The recovery can be partly attributed to August buyers holding off until September to confirm the first rate movement downwards, which has been the source of speculation for weeks,” said Malcolm Watkins, executive director of AFG.
Watkins has called on the Reserve Bank of Australia to pass on a 0.50% rate cut next week. He also urged the federal government to infuse more funds in the mortgage market to shore up this bounce.
“It’s critical that the funding arm is available to smaller lenders, including non–bank lenders and building societies, whose ability to participate have been clamped off due to spiralling funding costs. This will encourage a wider choice of home loans, and exert pressure on the majors to pass on more of any rate cuts. Lack of competition ultimately means consumers will suffer at the expense of shareholders,” said Watkins.
