My long term readers will be aware that I have followed the loan issuance data from AFG since I started blogging. Over time I have noticed quite a few problems with their reporting and data, most notably a large revision in LVR calculations that went completely unmentioned by AFG themselves. Over the last few months I have been questioning whether it is worth continuing tracking their data because of these anomalies and the fact that their overall reporting seems to be out of step with the broader market direction.
Back in early september I noted that AFG had reported a large surge in mortgage issuance:
August mortgage sales surged to their highest volume in over eighteen months according to AFG, Australia’s largest mortgage broker. AFG processed over $2.7 billion of mortgages in August – the highest volume figure since March 2010. Refinancing accounted for 38.2% of all mortgages as property owners took advantage of a highly competitive lending environment.
While August figures are typically stronger than previous months, these figures trend well above seasonal expectations. There was a sharp increase in fixed rate home loans as lenders heavily discounted their rates. Fixed home loans comprised 9.4% of all loans processed compared to 7.9% in July – the highest level since December 2010.
We now know however that there was no surge in housing credit and in fact the housing market melt continued. Given this latest data I have finally decided to give up reporting AFG data as in my opinion is no longer is providing any value to MB readers.
Below is their report for October, it is the last one I will be presenting.