Property owners trading up their family homes are returning to the market after a period in the deep freeze, mortgage broking firm AFG reported this week.
AFG's monthly Mortgage Index shows that in August 2009, after property investors, first home buyers and refinancing were taken out of the mix, trade-up buyers accounted for 22.8 per cent of all mortgages sold.
This compares to a figure of just 14.3 per cent six months ago, in February 2009.
AFG's Index also shows that loan to value ratios (LVRs), the value of loans expressed as a percentage of property value, eased slightly in August from 67.0 per cent to 66.3 per cent.
This confirms a higher level of activity by people moving into their second or third homes, who tend to borrow proportionally less than other categories of property buyers.
General Manager of Sales and Operations at AFG, Mark Hewitt, commented that the re-emergence of trade-up buyers is a further encouraging sign that markets are beginning to normalise.
"AFG would like to see more state governments following the example of WA where the Keystart model is continuing to provide access to funding for borrowers who may not qualify for loans with mainstream lenders", Hewitt said.
"The actions of the WA government are helping underpin the long-term sustainability of the property market in WA and it would be great to see other state governments follow their lead."
AFG Mortgage Index shows that fixed rate mortgages held steady in August at 5.1 per cent of all mortgages sold, as the majority of property buyers steer away from fixed rate products which have costed in at least two future rate rises.
The grip of banks on residential lending remained near its all time high in the second quarter, with banks accounting for 89.1 per cent of all mortgages sold, compared to 92.5 per cent in the first quarter 2009.