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Australian housing market heading into hole
Article from:
John McCarthy and Alex Tilbury
December 13, 2009 11:00pm
AUSTRALIA'S housing market is heading into a deep $14 billion hole as house prices escalate, the first-home owners grant stops and banks tighten lending requirements.
According to research company MISC, the market will face another three months of declining lending before a weak rebound in March.
It follows a disastrous September quarter during which $3 billion was lost from the lending market compared with the previous year. Queensland accounted for about half of that with a $1.6 billion reduction.
MISC says its research points to a 9 per cent fall in the amount of money lent by banks and mortgage companies in the 12 months to September 2010.
A big factor is that while people are saving for a deposit for their first home, prices escalate and push them further behind, MISC said.
The first-home owners grant, which finishes this month, had also brought forward home buying demand.
MISC said the value of the first-home owners grant had been eroded by rising prices.
When the market does start to climb out of the hole after March, the recovery would still be weak, it said.
Meanwhile, fierce competition among lenders is driving up rates on term deposit and online saving accounts.
Savers can deposit money for a year in a UBank (owned by NAB) account offering 6.81 per cent, or Queensland Teachers' Credit Union and Westpac, both offering 6.80 per cent. That's more than 3 per cent higher than the Reserve Bank's cash rate of 3.75 per cent.
Article from:
John McCarthy and Alex Tilbury
December 13, 2009 11:00pm
AUSTRALIA'S housing market is heading into a deep $14 billion hole as house prices escalate, the first-home owners grant stops and banks tighten lending requirements.
According to research company MISC, the market will face another three months of declining lending before a weak rebound in March.
It follows a disastrous September quarter during which $3 billion was lost from the lending market compared with the previous year. Queensland accounted for about half of that with a $1.6 billion reduction.
MISC says its research points to a 9 per cent fall in the amount of money lent by banks and mortgage companies in the 12 months to September 2010.
A big factor is that while people are saving for a deposit for their first home, prices escalate and push them further behind, MISC said.
The first-home owners grant, which finishes this month, had also brought forward home buying demand.
MISC said the value of the first-home owners grant had been eroded by rising prices.
When the market does start to climb out of the hole after March, the recovery would still be weak, it said.
Meanwhile, fierce competition among lenders is driving up rates on term deposit and online saving accounts.
Savers can deposit money for a year in a UBank (owned by NAB) account offering 6.81 per cent, or Queensland Teachers' Credit Union and Westpac, both offering 6.80 per cent. That's more than 3 per cent higher than the Reserve Bank's cash rate of 3.75 per cent.
