The mortgage market is becoming a tale of two seaboards with investors dominating the NSW and Queensland markets, according to mortgage broker AFG.
AFG's Mortgage Index shows that home loans for investors in December 2012 comprised 46.3 per cent and 35.9 per cent of all home loans arranged in the two states respectively.
The reason for this was that the average long term share of home loans arranged for First Home Buyers, usually between 12 per cent - 15 per cent, collapsed to just 4.2 per cent in NSW and 4.5 per cent in QLD during the last two months of 2012, after first home buyers grants were withdrawn in both states (except for new housing).
Meantime in WA, first home buyers comprised 23.2 per cent of all new home loans in December, while investors took up 30.5 per cent of mortgages. Strong migration, escalating rents, improving property values and low interest rates are encouraging many onto the WA property ladder.
Mark Hewitt, AFG’s General Manager of Sales and Operations remarked that the mortgage market is in need of two dynamics: more competition and greater consumer confidence.
‘It is still the case that just four institutions account for nearly nine out of every ten mortgages arranged in Australia”, Hewitt said.
“That level of concentration doesn't serve consumers well”, he added.
Fixed home loans fell to 18.7 per cent from 21.6 per cent of new mortgages in December as the majority of borrowers see the likely future trend of interest rates as going down.