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Australia's largest mortgage aggregator Australian Finance Group (ASX: AFG) reported lodgement volume of $13.94 billion for the March 2017 quarter, up by 8 per cent from $12.90 billion the prior year corresponding period.
The increase was largely driven by upgraders, with loan to value (LVR) ratios declining in all states except for South Australia, which saw a marginal 0.4 per cent increase. Indeed, the national LVR of 68.6 per cent was the lowest seen since 2013.
Those looking to refinance have been adversely impacted, with market share declining to the lowest level since the third quarter of 2015.
The index is not seasonally adjusted, and the March quarter is often a weaker period for lodgement volumes as it incorporates the quieter month of January.
The average mortgage size written through AFG brokers is typically higher than reported by the ABS, but the trend has tended to be similar and showed a slight decrease in the quarter to sit just under $487,000.
However, the average mortgage size has increased by 24 per cent over the four years since the March 2013 quarter.
Echoing what has been reported by the ABS, investor market share was nudged back down to 32 per cent, having peaked at 40 per cent for two consecutive quarters in 2015.
Despite this, regional data reported in the latest AFG investor presentation showed that New South Wales (effectively Sydney) still had investor loans accounting for more than 40 per cent of the local market.
The mirror image of this chart, first-time buyers have increased market share from 7 per cent to 10 per cent over the last three quarters, as the First Home Owners Grant (FHOG) now receives a shake-up.
In these click-conscious times this was always going to be reported as a "boom" in the media, although in reality first homebuyers accounted for a considerably higher 15 per cent of the market as recently as 2013.
In fact, I looked at the more comprehensive ABS figures for first time buyers in more detail here, which showed that over the last few years numbers excluding first time investors have trended steadily down.
Around the traps, Melbourne leads
Looking around the states it's once again clear that Victoria is seeing the biggest increase in activity, with lodgement volumes up very significantly from $3.36 billion to $4.25 billion over the past year.
Melbourne is scoring highest on virtually every housing market metric at the present time, so this comes as no surprise.
Conversely lodgement volumes have declined in the resources states of Western Australia and the Northern Territory.
Plotting the raw year-on-year change in lodgement volumes, we can see that the upwards movement was most pronounced in Victoria and Queensland.
Finally the average mortgage size was highest in New South Wales at a shade under $605,000, having increased by 32 per cent over the last four years.
However, the year-on-year growth in the NSW mortgage size has now slowed to under 3 per cent.
The strongest year-on-year growth in the average mortgage size was also seen in Victoria, rising from about $446,000 to $477,000 for an increase of 7 per cent.
This was a solid set of numbers for AFG, which was seen its share price rise from a low of 90 cents in September 2015 to $1.31 at the close yesterday.
This has barely rated a mention in the media, contrasting with the rainforests expended to report the high profile decline in McGrath Limited's (ASX: MEA) share price. Real estate service provider McGrath now has a market capitalisation of $87 million.
AFG reported in February an NPAT for H1 2017 of $13.4 million (which was up by a solid 14.2 per cent on H1 FY2016), and an interim dividend of 4.2 cents per share, up 40 per cent on H1 FY2016.
The AFG residential loan book continues to grow at a faster rate than the total
Australian residential mortgage market. Since 2010 AFG’s CAGR of 11.3 per cent is considerably higher than the wider market growth of 6.0 per cent.
Overall it has become clear that investor loans are now tracking in a tighter band of variability following APRA's crackdown on investor lending in 2015, while growth in the average mortgage size is also now slowing.
Expanding further on these figures I expect to see the fastest house price growth in 2017 in Melbourne, with the annual rate of price growth gradually slowing in Sydney as the year progresses.
Queensland has some rising housing markets but remains distinctly patchy reflecting the two-speed nature of the state's economy, while Perth and Darwin are housing markets still in decline.