Investor confidence returning

Homebuyers and investors are slowly coming back to the market, with mortgage sales during March bouncing back from the record lows of January and February, according to Australian Finance Group.
However, the company says the figures are still lower than a year ago. The $2.51 billion of home loans processed in March is up by 22 per cent on the February figure of $2.05 billion, but still 8.9 per cent lower than the $2.76 billion arranged in March 2010.
New South Wales recorded exactly the same figure for mortgage sales in March 2011 as March 2010. South Australia had a slight softening (-2.7 per cent) with greater differences recorded for Western Australia (-10.9 per cent), Victoria (-11.7 per cent) and Queensland (-15.4 per cent).
New South Wales also showed the highest level of investor activity, with 40.2 per cent of all new home loans being processed for investors – well above the national average of 34.7 per cent.
Australian Finance Group’s general manager of sales and operations Mark Hewitt says buyer confidence is slowly returning.
“The Reserve Bank of Australia holding off further rate rises has given some sense of normality and while the lender wars haven’t encouraged many people to switch, at least there’s now a feeling that lenders are trying to be competitive,” he says.
“In our view, last month’s banning of exit fees will have little, if any, positive effect on the market in the short term, and will certainly hurt non-major lenders going forward.”