Home buyers and homeowners confidence highest in 2 years
25/01/2012 
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Will Australia dodge of the pain of the Global recession, and a housing market crash that has plagued the US and the UK?
It is beginning to look that way. Australians’ confidence in the future have risen its best level in nearly two years, as home buyers and homeowners grew more optimistic about an early economic recovery. A predicted slide in house values hasn’t happened, and in many parts of the economy its business as usual.
The credit has to go in large chunks to PM Kevin Rudd and Treasure Wayne Swan and the Treasury Public service for their financial support of most groups in the community, and it’s that support in my view that has lead to record retail spending over the last few weeks. When you add record first home buyers entering the housing market, courtesy of the extended First home owners grant and Australia’s employers not shedding workers, and major infrastructure works to come on stream soon, lower personal taxes and increased pensions due in September, and China recovering faster that expected, Australia just may dodge the recession bullet all together.
Home loan figures just released show mortgage home loan finance demand rising for eight months straight, as the RBA [Reserve Bank of Australia] has set the lowest interest rates ever.
We are not out of the woods yet, and government forecasts the jobless rate to top 8.5 percent by mid-2011 and that will keep pressure on the RBA to keep mortgage rates low and The Central Bank has rarely tightened policy when the jobless rate has been rising.
On that basis we may not see mortgage interest rates increase until late 2010, unless the banks increase their margins and more rates up independent of movements in the official cash rate.
Rick Adlam has been helping clients with home loan finance since 1985 when he was home consultant with AV Jennings. Rick started Equity Home Loans in 1996 to help homeowners become property investors. Rick currently consults in the development of Mr Mortgage for mortgage brokers and HomeMate for new home buyers.
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