Australia has ended the first six months of 2007 with a positive coast-to-coast outlook for property markets, according to latest figures out from mortgage broker AFG.
AFG's Mortgage Index shows that the average Australian mortgage size - a reflection of property prices and confidence - increased 5.6 per cent from $300k in December 2006 to $317 in June 2007.
This increase was mostly fuelled by the buoyant, resource-fuelled WA market, where average mortgages rose a massive 13.5 per cent from $325k to $369k in the six month period.
But recovery is also underway in Victoria, where average mortgages grew 7.4 per cent from $268k to $288k. In New South Wales, average mortgages rose from $376k in December to $382k in May, although there was a fall back to December levels during June.
Queensland has seen a steady growth of 2.8 per cent in the six month period, with average mortgage sizes increasing from $282k to $290k.
Kevin Matthews, Director of AFG said that while the year started with a two-tier mortgage market, brokers are reporting that growth in WA is slowing down to more sustainable levels, while in New South Wales, and to a lesser extent Victoria, recovery is underway.
"Our expectations are that these trends will continue in the second half of the year. But we also expect an increase in Fixed Rate Loans as concerns about a widely-forecast rate rise take hold."
Currently, 20.4 per cent of all mortgages sold by AFG are Fixed Rate, down from an all time high of 25 per cent recorded last November, but historically still at a high level. This figure is expected to rise again if upward pressure on interest rates continues.
Property investment continues to be extremely strong in WA where AFG sells 44.8 per cent of all new mortgages to investors. This figure compares to 34.8 per cent for Queensland, 31.5 per cent for New South Wales, 24.9 per cent for Victoria and 27.1 per cent for South Australia.
