(ASX:AFG) Australian Finance Group Ltd brokers have finished the financial year on a high with the company recording $23,314,816,089 in mortgage finance lodged for Q4 2024. This figure represents the largest lodgement volume achieved since Q2 2022, and the largest ever recorded for a fourth quarter.
AFG CEO David Bailey explained the results. “Broker activity over the quarter was high and lodgement numbers hit more than 36,395 in the final three months of the 2024 financial year. This lift was led by compelling contributions from Western Australia and New South Wales which saw a jump in volumes of 22.02% and 18.7% respectively. Other states also contributed strongly with increases in Queensland (up 12.2%), South Australia (10.7%), and Victoria (10.4%),” he said.
Aligned with recently published Australian property indices, average loan size surged by almost $12,000 on the prior quarter, to $640,605 – the largest loan size on record for the AFG Index. This has coincided with double digit growth in volumes across the states. The national average Loan to Value Ratio (LVR) is at 66.6%, the highest since Q3 2022, likely reflecting increased house prices.
Investment loans were up from 31% to 32%, while those refinancing their loans dropped from 27% to 26%. “Interest Only loans are up from 19% to 21%, reflecting the increase in investor activity for the quarter,” he said. “Over the past two years we have seen Investor loans steadily creep up to now sit at 32% – up from 27% two years ago but still below the longer-term average of around 35%.
“Whilst total Investor loan lodgements for the quarter increased by 16% ($1 billion) on the same period of FY23, and 19% on the prior quarter, Victoria’s share of Investor loans has dipped below its long-term average in Q4 2024,” said Mr Bailey. “It will be interesting to see if the Victorian State Government property tax changes continue to impact the attractiveness of property investment in the Education State.”
Major lender market share is down from 61.7% last quarter to 57.2%, their lowest level since Q4 2022. “The major lenders and their associated brands are still ahead of the non-majors,” he said. “However, in a sign of competition slowly returning to the market, the non-majors did report market share increases across the board for the quarter, picking up market share with Investors, First Home Buyers, Refinancers and Upgraders.”
“For AFG Home Loans, we experienced our best quarter since Q1 2023, with our market share in the final quarter of 2024 coming in at 7.64%. This is a pleasing lift from 6.99% in the prior quarter, Q3 2024.
There was a slight uptick in Fixed Interest Rate products, rising from 1.6% in the prior quarter to 2.3% in Q4 2024, although still well below longer term averages.
“Lender Turnaround Times from lodgement to formal approval came in at 16.4 days for the quarter, the lowest level since we began reporting this metric,” he concluded.
