Mortgage News

Australian loan aggregator AFG say that a dramatic slump in mortgage sales in January may cause the RBA to rise rates in February.  AFG felt that this would be a crippling blow to the country’s fast-shrinking property markets.

In the past four months, mortgage sales have fallen steadily as first home buyers have exited the market, and upgraders have reacted to three rate rises in quick succession by freezing further borrowing.

Brett McKeon, Managing Director of AFG says: ‘The impact of three rate rises in quick succession has had a far more dramatic effect on property buying than anything we saw during the Global Financial Crisis. People are not moving or upgrading their family homes – they’ve slammed the brakes on borrowing.

‘We’ve seen a lot of data recently about rising house prices and increasing consumer confidence, all of which would suggest buoyant property markets. But the opposite is the case. The drip feed of rate rises is like water torture – people are anxious about when the next one is coming and how big it will be. Uncertainty about the future of rates is draining confidence out of the market.’

Graham Reibelt founder of the mortgage broker group Oasis Home Loans said that too many borrowers were being declined by the major banks and that was giving hope to the growing non bank sector.