Home loans plunge in 2015-16: AFG

Fresh evidence of post mining boom malaise in Western Australia’s property sector has emerged, with listed mortgage provider Australian Finance Group reporting a 13.4 per cent fall in the number of home loans in WA over the 2016 financial year.

The figures follow data released last week by market watcher CoreLogic-RP Data, which reported Perth's median house price had fallen by 7.4 per cent over the past 18 months, the worst mark among capital cities.

A similar pattern emerged in the finance data from AFG, with WA also the worst-performing state during FY2015-16.

On a national level, AFG’s overall loan volume grew by 7 per cent over the financial year, driven largely by strong results in Victoria and NSW.

Victorian home loans were up 16.6 per cent over the financial year, while in NSW they rose 12.2 per cent.

South Australia was also up 12.2 per cent, while Queensland recorded a lift of 4.2 per cent.

AFG general manager of sales and operations, Mark Hewitt, said the results were not at all unexpected and were reflective of the financier’s forecasts released last year.

“The numbers are strong despite a turbulent run in to the end of the financial year and the longest election campaign in memory finally coming to a close,” he said.

“Talk of negative gearing changes and changes to investment lending has seen many home buyers sit on their hands.”

Mr Hewitt said 38 per cent of home loans processed by AFG in 2015-16 were for refinancing, with borrowers seeking out the lowest possible rates.

“With interest rates at record lows are quite rightly checking with their mortgage broker to ensure they are not paying too much for their home loan,” he said.

“The number of people choosing to stay in their homes and upgrade rather than move is also at historical highs, closing out the financial year at 33 per cent of borrowers.”