Property investors in NSW went on a shopping spree, spending a whopping $180 million in property investment in December compared to $153 million over a year ago according to a new data from the Australian Finance Group. This equals to a 17% increase year on year and occurred even as the overall mortgage market is in decline.

AFG reported that two out of every five mortgages arranged in NSW during December were for property investment. "Property investors, able to take a long term view, are hoping to ride a new upwards cycle in property values, but right now, ordinary families are sitting on their hands rather than upgrading," said Mark Hewitt, general manager sales and operations at AFG.

The AFG survey also found that refinancing hit an all time high for the year, representing 35.5% of all mortgages sold in December as customers reacted to out of cycle increases by some lenders.

Fixed rate mortgages fell to an all-time low of 2% of the total loans sold by the mortgage broker. More than three in five borrowers chose variable loans despite expectations of further rate rises. The 2% is the lowest level ever recorded by AFG which saw fixed rate products account for 22% if the total mortgages sold in 2007.

The proportion of first homebuyers dropped to a low of 13.1% as the government boost is wound back.