Press Release

For immediate release

Information verified correct on December 9th, 2016

News Alert: Mortgage Season to be strong despite lower auction clearance rates

  • Number of home loans financed in August drops 4% month-on-month: ABS
  • New complex forecast by finder.com.au reveals strong Mortgage Season led by bigger sales
  • Concern for borrowers over-stretching themselves: watch out for rate hikes next year!

October 9, 2015, Sydney – Comments by Michelle Hutchison, Money Expert at one of Australia's biggest comparison websites finder.com.au:

"Despite three consecutive weekends of lower auction clearance rates falling below 70% and last weekend’s results hitting just 67% (based on Australian Property Monitors), we still expect a strong mortgage season this spring, with the value of property outpacing the number of home loans financed.

“The latest ABS Housing Finance data shows that there were 54,323 home loans financed in August – down by 4% compared to July.

Comparison website finder.com.au has forecast that the total number of home loans financed this spring will be 168,482 – 6,373 more than last year’s Mortgage Season, increasing by about 4%. This is based on a forecast using post-GFC data since 2010.

“Interestingly, the value of total home loans financed this spring is expected to be $65.2 billion, up from $54.3 billion last Mortgage Season or an increase of $10.9 billion – 5-times the growth of volume of loans financed (20%).

“This shows that many borrowers are clearly taking on more debt, with the national average mortgage size the biggest on record, hitting $371,200 in August. The growth is largely being driven by property prices going up at an increasing rate. CoreLogic PR Data shows an increase of 11% year-on-year from September (5 capital city aggregate), mainly lead by property in Sydney (+17%) and Melbourne (+14%).

“Also, existing homeowners are expected to make up about 85% of all home loans financed this Mortgage Season – this is approximately 2 percentage points higher than last mortgage season.

“Half of all loans are expected to be property owners moving up the property ladder or downsizing, who aren’t first home buyers or refinancing.

“During mortgage season, there is usually an increase in the number of first home buyers – this has jumped 3% on the preceding season on average over the last 24 years of available data.

“We’re also seeing more borrowers and prospective home buyers comparing home loans on finder.com.au/home-loans, with a 24% increase in the number of Australians inquiring about home loans on the site in September since the previous month.

“The biggest concern is that borrowers are over-stretching themselves and need to be careful not to take on too much debt while rates are low, as 60% of leading economists and experts in the finder.com.au Reserve Bank Survey are expecting interest rates to rise next year.”

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Please contact me for further details or to organise an interview with Michelle Hutchison, Money Expert at finder.com.au. Or feel free to contact Michelle directly on +61 403 192 994.

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Disclaimer

The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com.au's review pages for the current correct values.

About finder.com.au:

finder.com.au is one of Australia’s biggest comparison websites and has helped over 4.8 million Australians find better credit cards, home loans, life insurance, shopping deals and more since 2006. finder.com.au compares 250 credit and debit cards from 31 providers, over 300 home loan products, and information from 13 life insurance providers as well as online shopping promo codes, mobile phone plans, travel insurance and more. One Australian every five minutes is using finder.com.au or creditcardfinder.com.au to find better (Source: Google Analytics).

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