Investors returning to Queensland
New mortgage sales figures for May point to investors returning to the Queensland market.
More than a third of loans (36.5%) processed in Queensland in May were investment loans, the highest figure for more than a year, according to the latest AFG Mortgage Index.
This is just below the proportion of investment loans processed in Victoria (38.8%) and NSW (37.9%)
Mark Hewitt, general manager of sales and operations at AFG, tells Property Observer the Queensland market has reached a point where house prices have come down in past 12 months, meaning investors are seeing value in the market.
“We are not anticipating a massive rush, but there are positive signs in both Queensland and WA,” Hewitt says. “That there is a lot of stock available, especially on the Gold Coast.”
Looking at the overall market, Hewitt says property investment has remained at consistent levels throughout the ups and downs of the property cycle, but strengthened significntly in May.
“It is certainly a buyer’s market right now, and investors looking at rising yields are probably better insulated from the impact of rising interest rates than other types of buyers.”
Overall, mortgage sales increased by 18.8% in May Australia-wide.
Total mortgage volume for May was $2,517 million – only 1.7% lower than the figure recorded for May last year ($2,561 million), a strong result according to AFG in light of the natural disaster-hit first quarter, and subdued figures for April.
The release of AFG figures coincides with figures put out today by mortgage broker Mortgage Choice.
According to Mortgage Choice’s May figures, the most popular mortgage types are ongoing discount interest rate home loans, with one in three borrowers signing up for the product in May.
This is 3% higher than the 30% take-up of the product recorded a month ago and almost double the number who were approved for the product in November 2010.
The loan is particularly favoured in NSW, where it makes up 42% of all approvals. However, demand for these variable rate loans rose in all states apart from South Australia last month.
The second most popular loan type for May was standard variable rate, at 24%, closely followed by basic variable rate, at 23%.
Variable rate products accounted for 89% of approvals.
Fixed rate loan demand dropped one percentage point from April to May, to 11% of approvals.
Source: Mortgage Choice
