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cobran20

Has the debt tide turned ?

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good stuff, maybe people aitn willing to bullsh*t their way into a loan at any cost now., i knew quite a few who did to get into their own house and worried how they would pay after.

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NEWS: Floods and interest rates hit homebuyer confidence

NEW mortgage growth in January was the slowest for seven years, with homebuyers frightened by higher interest rates and the economic uncertainty caused by the southeast Queensland flood crisis.

A report from AFG, the nation's largest mortgage broker, showed just $1.3 billion worth of loans were processed through its brokers in the first month of this year, 40 per cent down on its usual monthly average. There was a 48 per cent drop in the number of new mortgages in Queensland because of the floods, but business remained weak across the rest of Australia.

The study showed the number of new mortgages in Victoria dropped by 39.6 per cent, South Australia (33.6 per cent), NSW (31.8 per cent) and Western Australia (28.6 per cent), The Australian reports.

AFG executive director Kevin Matthews said new homebuyer sentiment remained weak, with consumers fearful of higher mortgage repayment costs, despite lending rates being below the recent averages.

"We knew because of the floods that Queensland would be down, but the rest of the country seems to have gone out in sympathy," Mr Matthews said. "The standard variable rates are around 7 per cent -- if you look historically over the past 20 years, that is not that high. On top of that, even the flood levy of 0.5 to 1 per cent, people are having to say 'let's factor that in'.

"That is leading to a lot of people saying 'well, let's wait and see'. People are being spooked. There is not that level of confidence among homebuyers that there has been in the past, people are now saying let's be super conservative."

Consumer demand for credit has weakened dramatically over the past six months, with Australians beginning to save, rather than spend.

The most recent figures showed private sector credit demand rose just 0.2 per cent, while business credit fell for the sixth consecutive month in December.

Housing finance data in November revealed a mixed outlook with a 2.9 per cent increase in owner-occupied finance, but a sharp 2.3 per cent contraction for investment housing.

Mr Matthews said the mortgage brokers' customers remained most reliant on home loans from the top four banks. The top four banks retain nearly 85 per cent of the mortgage market in Australia, with Westpac and Commonwealth Bank dominant

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good stuff, maybe people aitn willing to bullsh*t their way into a loan at any cost now., i knew quite a few who did to get into their own house and worried how they would pay after.

If you truly believe that you will be "priced out forever", and that prices only ever go upwards, and that viewpoint is reinforced by everything you read and hear, and by nearly all of your relatives, friends and colleagues, that course of action would seem quite sensible.

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