February 16, 2011
Despite the lure of an ever-enticing $7000 First Home Owner Grant coupled with up to $19,500 worth of other grants on offer, the number of new Australian owner-occupier mortgages hit a 10-year low in 2010.
Research released by Datamonitor, sourced from Australian Bureau of Statistics (ABS), revealed the number of mortgages for owner occupation taken out last year were the lowest since 2000, reaching just 575,000 – an alarming 26 percent drop from 777,000 in 2007.
Considering the average home loan doubled from $133,000 in 2000 to $286,000 in 2010, surpassing rises in average incomes, it’s no wonder the number of homebuyers has dropped.
Tight affordability teamed with recent rising interest rates make young, first-time buyers reluctant to dip their toe into the home-loan pond.
If that’s not dismal enough, experts predict another 25 basis point rise sometime this year, encouraging prospective buyers to rethink making that all-important step towards home ownership.
Are first home buyers coming back?
But don’t feel too disheartened by these figures over the past decade, as last year saw a small glimmer of hope with the ABS reporting a small 1.1 percent rise in owner-occupation from October to November.
Swim against the property tide and compare home loans online today to ensure you score the best deal.
A quick comparison on RateCity shows State Custodians sport one of the lowest standard variable interest rates of 6.74 percent while IMB Banking & Financial Services trails behind with a rate of 6.82 percent.
It’s not all doom and gloom; there are some perks to be had from the crumbling housing market. While the demand for property plummets, there may be no better time to compare home loans as the banks compete for your business.
Don’t dive in without doing the maths
It’s important to do your homework, because a difference in interest rates could add up to thousands.
For example, on a $250,000 variable loan with one of the lowest comparable rates of 6.74 percent means monthly repayments of $1620, whereas the average standard variable home loan rate of 7.34 percent would cost nearly $1721 per month.
It may not seem like a lot, but it expands to an extra $36,360 over a 30-year loan, providing incentive to compare home loans online.
And if you’re looking to dive into the property market, expect to save thousands of dollars as declining demand means owners might be more willing to negotiate a little more on price.
As property prices continue to soar, now might be time to get in quick before they become unaffordable. Compare home loan deals online today and find the cheapest rate before you miss the boat.
Related Mortgage Links