AFG mortgage sales reverse in September

New mortgage business for Australian Finance Group fell 21 per cent during September compared with August.

The AFG Index, which is a measure of just that firm's sales but also serves as a handy indicator of market trends shows that sales fell 27 per cent in New South Wales, with sales down 22 per cent in Western Australia and 21 per cent in Victoria.

Mark Hewitt, general manager of sales and operations at AFG, said property buyers are holding off due to concerns about global debt markets and the unknown potential of the sub-prime fallout.

"On the positive side, the underlying market is still strong, especially in Victoria where we are seeing higher levels of confidence in property than we have for some time."

The average Australian mortgage value reached its highest level at $329,489, with Victoria passing the $300,000 mark for the first time, increasing by more than fifteen thousand dollars for the month to $304,950.

Customers are locking in the interest rate with fixed loans moving from 18.3 per cent of all loans in August to 20.4 per cent in September, at the expense of standard variable loans, which declined from 41.2 per cent to 38.8 per cent.

Paul Lahiff, managing director at Mortgage Choice, said they had not experienced anything like the percentage declines of AFG.

"The first three months of the fiscal year have been positive, and in our view there is still plenty of activity in the mortgage broker field with auction clearance rates remaining strong."