Latest NewsMortgage Sales Jump 11% in AugustThursday, 16 March 2017

Mortgage sales jumped 11 per cent in August as homebuyer confidence strengthened and mortgage delinquencies stabilised.

Home sales across the nation reached 6,269 during August, 10.9 per cent higher than in July, as first home buyers continued to return to the market, according to Australian Finance Group Ltd (AFG).

Australia's biggest mortgage broker said first home buyers' share of the mortgage market troughed at 9.5 per cent in June, before climbing to 11.1 per cent in July and 11.7 per cent in August.

The trend was strongest in NSW, with sales to first home buyers now making up 15.5 per cent of all sales in that state, up from 11.7 per cent in June.

Confidence among homebuyers is upbeat and is now above 2008 levels but has yet to surpass 2009 levels, lenders mortgage insurance provider Genworth Financial says.

But the evidence on homebuyers' affordability is mixed, with Genworth's index of homebuyer confidence indicating 20 per cent of homebuyers expect to have repayment difficulties over the next 12 months.

However, global ratings agency Moody's Investors Service measured delinquency rates on prime mortgages and found they had stabilised at 1.39 per cent in the June quarter.

Moody's vice-president Arthur Karabatsos isolated two regions of the country as being at risk.

Borrowers in outer southwest Sydney, and in the Sydney suburbs of Fairfield and Liverpool, had the highest level of delinquencies across Australia, with 2.5 per cent to three per cent of loans falling into arrears that are past 30 days due, he said.

If the Reserve Bank of Australia (RBA) kept official interest rates on hold, Moody's does not expect significant pressure on delinquency levels, Mr Karabatsos said in a statement issued on Tuesday before the RBA reported its decision to keep the cash rate at 4.5 per cent.

RBA governor Glenn Stevens said that interest rates were sitting at around their average levels of the past decade.

"Credit outstanding for housing has slowed a little over recent months, and the upward pressure on dwelling prices appears to have abated," he said in a statement on Tuesday.

Moody's said delinquencies could rise if interest rates were to increase, but would not reach the 1.63 per cent level seen in January 2009.

Australians still prefer to run the gauntlet of rising interest rates, with just 3.9 per cent of buyers in August fixing their mortgage loan, while 60.8 per cent took out a standard variable loan, AFG said.

Rival Mortgage Choice put the number of buyers fixing loans at 2.65 per cent in August, up from 2.01 per cent in July.

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