Home borrowing hits 7-year low

Thursday 03 February 2011

Article by Mozo

Mortgage lending slumped to a seven-year low in January, according to figures from AFG, the nation's largest mortgage broker.

Home borrowing hits 7-year low

The AFG report, which was obtained by The Australian, stated that only $1.3 billion worth of home loans were processed through the broker network last month, down 40 per cent on its monthly average.

While Queensland saw a 48 per cent drop in the number of new mortgages in the wake of the floods, lending also fell across the country as new homebuyer sentiment remained weak.

Indeed, it was shown that in Victoria, the number of new home loans dropped by 39.6 per cent, in South Australia by 33.6 per cent, in New South Wales by 31.8 per cent and in Western Australia by 28.6 per cent, The Australian said.

AFG executive director Kevin Matthews noted that fewer people were opting to compare home loans and commit to a mortgage following last year's interest rate rises and the economic uncertainty caused by the flood crisis.

"There is not that level of confidence among homebuyers that there has been in the past, people are now saying let's be super conservative," he added.

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