Opportunistic investors are responsible for an 18.8% "surprise" spike in mortgage sales in May, according to Australia's largest aggregator Australian Finance Group (AFG).
While acknowledging May as a traditionally strong month for mortgage sales before a quieter winter period, AFG said the 18.8% national increase when compared with a "subdued" April represented surprising strength.
General manager of sales and operations Mark Hewitt explained the rise on buoyant property investment, which he said had remained at consistent levels throughout the ups and downs of the property cycle, but strengthened significantly in May.
"It is certainly a buyer?s market right now, and investors looking at rising yields are probably better insulated from the impact of rising interest rates than other types of buyers," he said.
AFG's figures show that investors accounted for 36.5% of the market in May. However, investors in New South Wales and Victoria were more active than the national average, accounting for 38.8% and 37.9% of loans in those individual states respectively.
The investor-led boost saw overall mortgage sales for AFG rise from $2,119m in April (5,489 loans) to $2,517m in May (6,483 loans). This compares with April ($2,329m) and May ($2,561m) in 2010. Average loan sizes also increased to $388K in May, up from $386K in April, which represented an increase on last year's average loan sizes, which were $386K in May and $378K in April 2010.
AFG found that non-major lenders rgarnered greater market share in May, at 19.6% of all mortgages. First home buyers were their biggest supporters, sending 22.9% of new business to non-majors.
