$23 billion the largest volume ever for a fourth quarter
Brokers belonging to Australian Finance Group Limited, one of the Australia’s largest aggregators, are celebrating after lodging $23.3 billion in mortgage finance for Q4 204 – the largest figure ever recorded for a fourth quarter.
In announcing the figures on Wednesday, AFG said the $23,314,816,089 figure was also the largest lodgement volume achieved since Q2 2022.
AFG CEO David Bailey (pictured above) said broker activity over the quarter was high and lodgement numbers hit more than 36,395 in the final three months of the 2024 financial year.
“This lift was led by compelling contributions from Western Australia and New South Wales which saw a jump in volumes of 22.02% and 18.7% respectively,” Bailey said. “Other states also contributed strongly with increases in Queensland (up 12.2%), South Australia (10.7%), and Victoria (10.4%).”
The AFG Index Q4 2024 data also revealed the average loan size grew by almost $12,000 compared to the prior quarter, to $640,605 – the largest loan size on record for the AFG Index.
Bailey said this coincided with double digit growth in volumes across the states.
The national average Loan to Value Ratio (LVR) is at 66.6%, the highest since Q3 2022, likely reflecting increased house prices.
Investment loans were up from 31% to 32%, while refinancing loans dropped from 27% to 26%.
“Interest-only loans are up from 19% to 21%, reflecting the increase in investor activity for the quarter,” Bailey said.
“Over the past two years we have seen Investor loans steadily creep up to now sit at 32% – up from 27% two years ago but still below the longer-term average of around 35%.”
Total investor loan lodgements for the quarter increased by 16% ($1 billion) compared to the same period in FY23, and 19% on the prior quarter. However, Victoria’s share of investor loans dipped below its long-term average in Q4 2024.
“It will be interesting to see if the Victorian government property tax changes continue to impact the attractiveness of property investment in the ‘Education State’,” said Bailey.
Major lender market share falls
Major lender market share fell from 61.7% last quarter to 57.2%, its lowest level since Q4 2022.
Bailey said the major lenders and their associated brands were still ahead of the non-majors.
“However, in a sign of competition slowly returning to the market, the non-majors did report market share increases across the board for the quarter, picking up market share with investors, first home buyers, refinancers and upgraders.”
AFG Home Loans perform well
The index also revealed that AFG Home Loans had recorded its best quarter since Q1 2023, with market share in the final quarter of 2024 coming in at 7.64%.
“This is a pleasing lift from 6.99% in the prior quarter, Q3 2024,” Bailey said.
He said there was a slight uptick in fixed interest rate products, rising from 1.6% in the prior quarter to 2.3% in Q4 2024, although still well below longer term averages.
“Lender turnaround times from lodgement to formal approval came in at 16.4 days for the quarter, the lowest level since we began reporting this metric.”
What do you think is driving the uplift in AFG mortgage lodgement volumes? Comment below.
