Fewer Australian homeowners are failing to repay their mortgages, even if that means resorting to a sale. Figures from the Fitch Ratings Dinkum residential mortgage-backed security index show that those who are three or more months behind in their home loan repayments are frequently able to clear the debt by selling their homes. While this is always a last resort we are at least in a situation where a large number of those who find themselves in financial peril have equity in their homes to avoid them getting further into trouble. Fitch is, however, warning that even if there is an interest rate cut in the New Year, economic conditions may not guarantee that house prices stay high and the credit agency is also concerned that unemployment could increase.
REIA slams further regulation of mortgage market
The Real Estate Institute of Australia has slammed moves by the Australian Prudential Regulation Authority to clamp down on home lending and the Australian Securities and Investment Commission’s review of interest-only loans. REIA CEO Amanda Lynch said: “These attempts to introduce tighter controls on housing loans and target property investors are totally unnecessary and a blunt instrument that adversely affects the entire market and not just one or two hotspots.” The association highlights that evidence shows a cooling of house prices as more supply becomes available and argues that the measures will damage the market. Lynch is concerned about how other countries’ efforts to cool the market has impacted those hoping to own their first home: “We know from the New Zealand experience that moves such as these disproportionally affect first home buyers and APRA’s decision comes at a time when first home buyer levels in Australia have hit a record low.” The Bank of New Zealand has recently announced a change to its policy due to its effect on first home buyers.
Sydney auctions near record levels again this weekend
The auctions will be fast and furious again this weekend with the last big weekend of the year set for near-record levels of properties going under the hammer in Sydney. Tomorrow will see 979 auctions following last weekend’s summer record of 1028. How many homes actually find new buyers though is another matter; the four week average is 73.2 per cent but last weekend’s clearance rate was just 70.5 per cent.
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