Latest figures reveal 39.6% of mortgages processed in March were for investors

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Australian Finance Group (AFG), Australia’s largest mortgage broker, says two in five new home loans in March were processed for investors.

The figure is record-breaking, according to AFG, being the highest recorded in the 7 years it has been reporting mortgage data.

Mark Hewitt, general manager of sales and operations says: “Investors have been driving the market for most of the past 12 months to the point that two in five of all new home loans in March were for investors. The vast majority of these are mum and dad investors taking advantage of the equity in their existing properties and the low rate environment to build their property portfolio.”

Fixed rate loans comprised 23.9% of all mortgages processed in March, a significant decrease from 30.7% of April 2013.

“The fact that fixed rate loans are now less popular than they have been for most of the past year suggests that borrowers are also less concerned about the prospect of potential rate rises,” Mr Hewitt said.

In New South Wales, investors comprised a whopping 49% of all new home loans, in Queensland and Victoria it was 37% and in South Australia and Western Australia investors accounted for 32%.

I find these figures amazing as our research over the past 12 months has found an enormous amount of contracts collapsing throughout the industry due to the valuer’s who are driving down prices by under valuing brand new properties often well below replacement cost, plus under valuing the investors homes that the equity is being used in?

Hopefully the above report is showing a genuine change in the market?