Australian Property Market Continues To Recover

Post by NeilMc on August 13, 2009 · Under Business News, Property Market, banking, home loans, interest rates, mortgages · Comment

Further signs that the Australian property market continues to recover have emerged, with the average new mortgage in Australia reaching record highs in July of $345,000, showing that confidence in the property market is increasing.

AFG’s Mortgage Index has shown that average mortgage values have been rising since May, having reached a bottom of $339,000 in January.

The data shows that property prices based on average mortgage values in New South Wales were the highest, followed by Queensland and Victoria. The average loan size in each of those states is $407,000, $339,000 and $321,000 respectively.

The results of the survey conducted by AFG, also suggest that the popularity of fixed rate home loans has declined rapidly. The data shows that the number of fixed rate mortgages fell from 8.3 per cent in June to 5 per cent in July.

Mark Hewitt, AFG’s general manager sales and operations said Australia continues to see increasing confidence in the property market on a weekly basis.

“Recent reports of house price increases are stimulating the market as a whole, and encouraging investors in particular. That said, because interest rates remain at 40-year lows, we’d encourage buyers to take into account the fact that their mortgages will almost certainly cost more to service as the overall economy picks up,” he said.

Activity from investors remains strong, with 30% of all activity coming from that section, while first home buyers make up 19% of the mortgage market.

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