People buying their second or third homes are now emerging as the dominant force in the market as first home buyer activity begins to unwind according to a new data.

The AFG Mortgage Index showed that in the month of August, trade-up buyers accounted for 22.8% of all mortgage sold - this compares to just 14.3% in February this year. The loan to value ratio or the proportion of home loan taken against the property value has also eased slightly to 66.3% from 67%.

"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," said Mark Hewitt, general manager of sales and operations, AFG."The re-emergence of trade-up buyers is a further encouraging sign that markets are beginning to normalise."

Standard variable loans remain the most popular, accounting for more than half (50.6%) of the mortgages sold. Borrowers opting to lock their rates remain steady at 5.1% as majority of property buyers steered away from fixed rate products whichcurrently carry the equivalent of at least two future rate increases.