Latest NewsHome Loans SoarFriday, 07 October 2016

AAP

The federal government's enhanced first home owner grant helped mortgage brokers write more than $18 billion of home loans in the June quarter, an 18 per cent increase on the same period a year ago, a report says.

Mortgage brokers wrote and settled $18.3 billion in new home loans in the June quarter, figures from independent consultants Market Intelligence Strategy Centre (MISC) found.

It was the largest quarterly amount since MISC started collecting this data in 2000 and was up 18 per cent on the quarter a year ago.

"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," the report said.

"Many brokers and lenders were run off their feet with surging demand ... not just for first home buyers but also investors."

The size of the average home loan rose 8.6 per cent to $267,724 in the June quarter, from $246,626 a year ago, the report said.

Senior corporate affairs manager at Mortgage Choice Kristy Sheppard said home loans approvals at the mortgage broker had grown over the previous three quarters and was optimistic about prospects for the period ahead.

"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," Ms Sheppard said.

Ms Sheppard said that in addition to a lift in first home buyer activity, there was also a "noticeable spike" in interest from "upgraders and investors" over the past two months.

In October last year, the temporary boost to the first home owner grant was lifted to $14,000 for those buying an existing home and $21,000 for those who chose to build their own home or buy a new home.

It was reduced to $10,500 and $14,000, respectively, on Thursday, October 1.

A report from Genworth Financial published in June found that 41 per cent of borrowers said they used a broker for their most recent loan, up from 30 per cent in 2005.

Among the banks, ANZ Banking Group had the highest proportion of total housing loans outstanding that originated from a broker. at 50 per cent, according to figures from Mortgage Choice.

Ms Sheppard said prospective home buyers wanted someone to talk them through the range of products available at different lenders.

"A mortgage broker tends to explain that a lot better than one lender," Ms Sheppard said.

"People want credibility, they want guidance, they want someone to hold their hand and they want a range of choices and someone who is happy to sit down and talk to them about the mortgage market."

MISC conducts research on behalf of banks and brokers.

It gathered data from 85 per cent of all broker generated home loan business.

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