AFG reports uptick in home loans lodged

Homebuyers continue to favour mortgage brokers as preferred channel

AFG reports uptick in home loans lodged

Home loans lodged by Australian Finance Group (AFG) brokers reached a total of $20 billion in the third quarter of the financial year 2024, representing a 4.7% increase compared to the same period last year.

The rise, AFG said, reflects the growing number of homebuyers turning to mortgage brokers amid current economic challenges.

“The AFG Index for the third quarter of the 2024 financial year has recorded an uptick in lodgements across all states on the same period last year,” said David Bailey (pictured above), CEO of AFG.

“A like-for-like comparison on Q3 23 shows the activity was led by Queensland, up 10.45%, South Australia up 13.24%, Western Australia up 6.78%, and New South Wales up 3.86% on Q3 23.”

Victoria saw the smallest growth at 0.34%, with Bailey attributing the sluggish result to the recent land tax changes impacting property investors in the state.

The AFG Index data aligns with the MFAA findings, showing mortgage brokers’ market share climbing to 71.8% in the last quarter of 2023.

“Australians know their broker is there to help them and the fact that brokers have a legislated duty to put their customers’ best interests first, makes them the clear channel of choice,” Bailey said. “As bank branch closures continue across the country, brokers provide a vital distribution service.”

Despite brokers’ pivotal role and the cost-effective customer acquisition they offer lenders, the dominance of major lenders continues to pose challenges for smaller ones.

The market share of major lenders has increased to 61.7%, with refinancers and those upgrading homes mainly responsible for this growth, whereas first-time buyers tend to prefer non-major lenders.

AFG Home Loans enjoyed a market share increase to 7% from 5.3% year-on-year.

Investment lodgements through AFG brokers rose to 31% from 28%, and upgraders increased to 39% from 38%, while refinancers decreased to 27% from 31%.

AFG said the continued preference for variable rates was evidenced by fixed rate volumes hitting a record low of 1.6%, as borrowers await direction on interest rates.

Meanwhile, the national average mortgage size increased by $5,000 from the last quarter, with notable differences among states.

In NSW, the average mortgage size dropped, but the loan-to-value ratio increased, suggesting a slight impact on affordability due to rising property prices. Western Australia experienced the largest hike in average loan size, by $10,000, aligning with property price trends in the state.

Lender turnaround times from lodgement to unconditional approval matched the series’ record low at 17.2 days.

“Mortgage brokers continue to be the channel that delivers choice and convenience for Australian homebuyers,” Bailey said.

“In a high interest rate environment with cost-of-living pressures impacting us all, having a trusted broker onside to guide homebuyers through their options and help them secure the right finance to suit their individual needs continues to be vital.”

As a broker, are you seeing an increase in new clients seeking your home loan expertise? Let us know by leaving a comment in the discussion box at the bottom of the page.