AFG glimpses recovery
Australian Finance Group (ASX: AFG) released its mortgage index for the June 2019 quarter, which showed a 13 per cent seasonal quarterly lift and 'the first glimpses' of a recovery, although lodgement volumes were still 11 per cent lower than a year earlier.
Investor market share inched back up to 28 per cent, while non-major lenders helped interest-only loans to increase market share for a second consecutive quarter, now back up to 20 per cent of lodgement volumes.
After a flat period the average mortgage size written through AFG brokers hit a record high of $514,898.
New South Wales saw a record mortgage size of $627,609, though the biggest year-on-year state increase was seen in Queensland, up about $19,000.
Non-major lender market share hit a record high in the second quarter of the calendar year, but it's hard to imagine that the majors will allow market share to keep slip sliding away without putting up a fight.
And indeed ANZ announced today via broker channels that it will amend its floor rate downwards significantly in the coming days.
That's a significant move, and combined with rate cuts this will at last be the first meaningful positive that's been seen for housing in some time.
And - for some borrowers - this could add significantly to borrowing power.
Source: Redom Syed, Confidence Finance
There'll be all the usual criticisms, but it's worth pointing out that a 250 basis points buffer is still the equivalent of 10 (ten) immediate and permanent rate hikes with no increase in income.
And this when inflation expectations are at record lows.
