Home News Buyers seek cheaper properties, but prices still set to rise

Buyers seek cheaper properties, but prices still set to rise

Font size :

Homebuyers are going down-market, buying significantly cheaper properties as the threat of further rate rises continues to weigh on sentiment, new data has showed.

The Australian Bureau of Statistics (ABS) revealed that the average loan size for owner-occupied housing commitments dropped to $230,000 from $233,900 in February. This marked a 6% drop from the highs recorded in June 2007.

The total value of owner-occupied housing commitments fell by 6%. This figure was dragged down by a hefty drop in finance commitments to buy second-hand housing. Investment housing commitments tumbled by 9.5% nationally following a healthy gain of 8.8% in January.

"Rate hikes clearly spooked budding homebuyers," said Savanth Sebastian, equities economist with CommSec. "Not only have loans recorded the biggest drop in four years, but borrowers aren't going ahead with loans, and smaller loans are being taken out. Smaller loans effectively mean that prospective homeowners are going down-market. Homeowners and builders will feel added bargaining pressure when trying to sell and increase the likelihood of downward pressure on house prices."

However, Sebastian noted that the compelling fundamentals suggest property will be very much in focus towards the end of 2008, despite the headwinds of higher interest rates. "Population is growing at the fastest rate in 18 years, but supply of homes isn't keeping up, resulting in soaring rents and property prices."

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Mortgage News and Articles

Mortgage applications drop in second quarter Mortgage applications drop in second quarter

This marks the “beginning” of a downward trend, says Equifax executive Read more

To break monopoly, many smaller lenders could become banks To break monopoly, many smaller lenders could become banks The proposed change could break the Big Four’s monopoly over the mortgage market and help families get cheaper home loan rates ... Read more

Borrowing against the home: A strategy to pay for aged care Borrowing against the home: A strategy to pay for aged care Such debts can generally be divided into long-term and short-term loans ... Read more

NAB slashes growth forecasts for houses, units NAB slashes growth forecasts for houses, units Numerous factors, including tighter credit rules and the growing supply of new stock, have reined in Australia’s seemingly unstoppable housing market boom ... Read more

More mortgage news and articles

Sponsored Links

Sunday, Jul 23, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Whether you're a first homebuyer, looking to refinance, or investing, it's important to have the right loan for your needs. Just fill in a few details below and one of our trusted mortgage advisers will contact you.

A quick & easy way to find the right home loan
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords