Australian Property Market Surges During June Quarter

A report on the state of the Australian property market suggests that the Federal Government subsidy for first time home buyers has led to mortgage brokers writing more than $18 billion in home loans for the quarter ending June, representing an 18 per cent rise compared to the same period in the previous year.

The report authored by independent consultants Market Intelligence Strategy Centre says that home loans written by mortgage brokers during the June quarter amounted to $18.3 billion.

The amount of home loans written during the June quarter is the largest quarterly level the consultant has recorded since it began collecting data back in the year 2000.

“The results clearly demonstrate that the government first home buyer incentive often, enhanced by further state incentives), has turned the mortgage market, through brokers, around. Many brokers and lenders were run off their feet with surging demand … not just for first home buyers but also investors.” the report said.

The size of the average mortgage written during the June quarter increased by 8.6 per cent, and stood at $267,724, up from $246,626 in the previous year.

A spokesperson for mortgage broker Mortgage Choice said the firm was optimistic about the future and said that approvals for home loans in the June quarter had outpaced growth during the previous three quarters.

“We would expect that the September quarter will be on par with the June quarter, if not an increase on that June quarter in terms of approvals,” The spokesperson said.

Mortgage Choice also added that aside from an increase in first home buyer activity, there had been a “noticeable spike” in interest from those upgrading from their current home and those looking to invest in a second property over the last couple of months.

Last October as part of its fiscal stimulus package in response to the global economic slowdown the Federal Government increased its first time home buyer subsidy to $21,000 for newly built homes and to $14,000 for those buying an existing property.

The Federal Government grant will be reduced to $14,000 and $10,500, respectively, on Thursday, October 1.