Home Loans & Mortgages

When the RBA lifted interest rates in November last year I said at the time that it was one rate rise too many. The RBA was at the time focused more on getting Interest rates to “normal levels”, when we are not in normal times Since then many people have agreed with me, including members [...]

A growing number of mortgaged homeowners are feeling the pinch and mortgage payment arrears are rising to 2 percent in some areas of Australia. Whilst this is still tiny compared to what has happened in the US, it should be a red flag to the RBA when considering any further rate rises. In fact some are now believing that the next interest rate move could be lower.

In the US the average first home buyer is 44 and in Australia it was approaching 38 years old, but recently fell as a boost to the First Home Owners Grant spurred many young people to build new homes in 2009. Later figures are yet to be freely available, but I suspect that this has forced younger people into buying sooner and this would have meant that we are now in the zone wherehomebuyers are again creeping to 40 year old age bracket.
In the UK the figures in a survey showed 20% of potential first-time buyers expect to be 40 years old before they buy their first house.

The reason house prices are so high is that it has been easy for people to get into so much debt, increasing the pool of house buyers. To reduce the pool of homebuyers, either build more housing stock, or, make credit less available.

So now the Reserve Bank only has to sit on its hands a wait till things change, and maybe the big Banks will make good on their talk and raise their customers mortgage rates without the cover of an official rate rise.