According to recent statistics the mortgage sales in Australia during last October were the lowest in four years. There was a 17.5 percent decline in volume since October last year and a 4.3 percent decline from September 2010. With this in mind, and the changes expected from the Australian Government later this week, we thought we would update you with some recent mortgage developments which have the potential to further impact the market.

Recent Australian Finance Group (AFG) statistics

Mortgages fell by 13.1 percent month on month in New South Wales, which was the worst affected state. This is a drastic drop compared to the other states, with Queensland, being the second worst affected with a 6.4 percent fall and Victoria with a comparatively mere 3.9 percent fall. Other key findings include:

•   The percentage of property investors increased slightly, up 0.9 percent to 35.4 percent, while first time buyers fell from 12.6 percent in September to 11.8 percent in October. Refinancers increased by one percent to 37.8 percent of all AFG mortgages sold in Australia.
•   Equity loans increased in October from September by 1.4 percent to 10.4 percent, as did fixed loans (from 5.4 percent in September to 6.3 cent in October).
•   Standard variable loans fell from 61.4 percent in September to 60 percent in October.
•   Banks held 87.5 percent of loans arranged in the second quarter of 2010.

Julia Gillard’s crack down on bank mortgage exit fees

The big banks are looking likely to abolish mortgage exit fees (also known as deferred establishment fees) in a bid to avoid tough Government intervention as our Prime Minister Julia Gillard promises new measures to crack down on bank mortgage exit fees. The push for change came about after the interest rate rise of 0.25 percent last week. These exit fees usually cost customers upwards of $900, so this will be a welcome change to many people who are unsatisfied with their current bank, and are wishing to change. The proposed changes are likely to make this a much easier and less costly process.

So keep your eye out for what seems to be a promising change to Australia’s major banks, as the Federal Government and ASIC will this week unveil new penalties for banks deemed to have gouged borrowers with unfair exit fees. The move is expected to encourage more competition in the home loan mortgage market and may provide more competitive interest rates.

If you would like any further information or have an queries regarding your mortgage and investment strategies please contact our experienced team of Accountants, Lawyers and Financial Planners, here at The Quinn Group. For more information on these updates or for any personal mortgage issues submit an online enquiry or call us on 1300 QUINNS (784 667) or on +61 2 9223 9166 to book an appointment.

Enquire today and we will get back to you next business day.