The outlook for the Australian mortgage market remains strong, with independent market analyst Datamonitor predicting that lending commitments will top $349bn by 2012. However, it warned that the next 12-18 months have more uncertain prospects.
Lending commitments for residential mortgages is expected to grow at an average rate of 5.8% in the next five years - a markedly slower pace compared to the average annual growth of more than 12% in the past 15 years.
Petter Ingemarsson, financial analyst at Datamonitor, blamed the record low housing affordability, exacerbated by the global credit crunch and falling consumer sentiment, for the slower growth. 'Global turmoil in the financial markets has increased risk aversion in both lenders and borrowers, with loans in higher-risk categories losing favour," he said. 'Consumer sentiment has dropped as people have become more cautious towards credit. Furthermore, the Australian property boom has priced many potential mortgagors out of the market, and 12 consecutive rate rises have exacerbated low mortgage affordability."
Ingemarrson noted that the slowing mortgage market will have severe effects for those who are trying to get into the property market, as well as those who are already in it. 'Getting a mortgage will be harder as lenders will be more restrictive," he said. 'Mortgagors who were looking to refinance their loans will be in even more dire straits, as they may find themselves stuck in a mortgage they can't afford in the long term."
For practical tips on how to buy your first home and refinance smartly, read the latest issue of Your Mortgage magazine, on sale now.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker
Top Suburbs :
east victoria park
Get help financing your investment
Do you need help finding the right loan for your investment?
When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.
Just fill in a few details below and we'll then arrange for a local expert Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus, our mortgage broking service is at no cost to you.
We value your privacy and treat all your information seriously - you can check out