Mortgage experts are worried that Australians may be taking on unsustainable debts, as the numbers of seized Victorian properties continue to grow amid record-low interest rates this month.
Foreclosed properties by major banks and lenders have resulted in 7,830 people losing an asset in the past five financial years. These include homes, units, businesses and lands.
Since June 2014, some 935 properties have been taken by lenders, amounting to $475m.
For industry watchers, it is alarming that despite the 0.25% rate cut imposed by the Reserve Bank of Australia this month, the average number of properties being repossessed have still risen.
This trend appears only to be the start of a series of more foreclosures in the future, said Mike Berry, RMIT University Research Centre of the Australian Housing professor.
“In Australia, these days we have an issue with overcommitting so people go in mortgaged to the hilt because they want the best possible house in the best possible place,’’ he told The Herald Sun.
“Interest rates will begin to rise at some stage and when they rise, that puts pressure on. My feeling is we are in a bit of a holding pattern. But if interest rates stop falling and unemployment keeps rising in the first half of next year, we can expect to see a jump.’’
Figures for Victoria saw a peak in foreclosures from 2011-12, with 2,051 cases. Declines have also been seen every year since.
September experienced a five-year high with 253 foreclosed homes.
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