Mortgages surge on first home buyer impetus
Despite statistical data suggesting a slowdown in home building activity in January, the Australian Finance Group (AFG) has produced research revealing that February was a boom month for mortgage sales, driven by first home buyers looking to take advantage of the doubling of the First Home Buyers Mortgage Scheme.
However, the general manager of sales and operations at AFG, Mark Hewitt, said the increase recorded in first home buyers over the past four months represented a double-edged sword for the industry.
"It is positive in that it underpins the future recovery of mid-level property markets by getting significant numbers of people onto the property ladder," he said. "But we are concerned that if the Government doesn't announce an extension of the grants fairly soon, we'll continue to pull demand forward and will be left staring over a cliff come the end of June."
The AFG Mortgage Index showed that total mortgage sales leapt a massive 40 per cent between January and February this year, compared with the usual 20 per cent increase between those two months.
The AFG index also showed that fixed rate loans had fallen to an all-time low of 2.5 per cent of all new mortgages in February, having peaked at 27 per cent in November 2007.
AUTHOR
Mike Taylor
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