Mortgage sales slumped by 9.1 per cent over the past month, according to sales data compiled by the mortgage aggregator Australian Finance Group. Brokers affiliated with AFG wrote $2.1 billion of loans in July, compared to $2.3 billion in June.
The number of sales fell from 6159 in June to 5698 last month, a fall of 7.5 per cent.
AFG's figures show a declining trend since March, when AFG brokers sold 7376 loans worth a total of $2.7 billion. The market has fallen 22 per cent since then.
The size of the average mortgage fell from $377,233 in June to $370,505 last month. The average loan size fell very sharply in New South Wales - down from $455,649 to $428,943, suggesting that it is the high end of the market that is slowing most.
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The AFG data is not subject to any adjustment for seasonal factors and represents measures of its new business levels.
AFG general manager sales and operations, Mark Hewitt, said he did not expect the sharp downward trend to continue.
Hewitt said: "It is normal for July to be a slow month. This was slower than usual because of school holidays and the calling of the election.
"Six interest rate rises have also take their toll but we expect things to pick up. The last week of the month saw conditions getting back to normal and the first week of the new month has also seen more normal conditions.
"We are getting towards spring and the Reserve Bank's decision to hold the cash rate will help."
Cheap fixed rate loans have failed to attract borrowers. Fixed rates loans made up 3.4 per cent of the total in July, down from 3.9 per cent in June.