Mortgage sales slip in June: AFG

Sales of mortgages in Western Australia declined by 12 per cent in June, matching the national slow down, according to the latest figures from Perth-based AFG, Australia's largest mortgage broker.

AFG Mortgage Index shows that mortgage sales declined from 8,648 to 7,599 nationally, with most states recording a 12% - 13% downturn.

Even in booming WA, AFG monthly mortgage sales declined by 12% from 1,834 in May to 1,613 in June - a somewhat larger downturn than that recorded for the same two months last year.

While May mortgage sales were strong for AFG, and a downturn in June was not unexpected by the company, these are the most up to date figures from the property finance sector - and confirm industry expectations.

Malcolm Watkins, Executive Director of AFG says: "Seasonal factors, the stock market correction and even World Cup fever may account for some of the decline in June. However, it may also be that we're starting to see the latest rate rise begin to bite. Along with other participants in the property market, we expect somewhat more subdued trading in WA in the months ahead."

AFG Mortgage Index saw the seventh consecutive increase in the average size of a new WA mortgage in as many months, with an average figure of $327k recorded for June. This compares with $244k for June 2005 - a 34% increase in the past year.

The extremely high level of property investment activity in WA continued into June when 48.1% of new mortgages were advanced to property investors, as opposed to owner occupiers. This figure compares to a national average of 31.2%.

Nationally, the proportion of Fixed interest mortgages continued to increase in June. 20.7% of new property buyers chose to fix their rates, compared to a figure of just 9% in August 2005, reflecting consumer caution about future interest rate rises.

AFG is Australia's largest mortgage broker and has 10.4% of the WA market (Source: ABS and AFG statistics).