There is projected to be a decrease in demand for mortgages as the Australian home price boom cools down.
Slowest pace for a year, but still more than 20% increase over 2021 for the nation’s housing market as measured by CoreLogic.
This slowdown has been blamed on rising fixed mortgage interest rates and affordability limitations.
Banks tightened lending requirements in October to guarantee that prospective homeowners can afford their mortgage payments once interest rates on variable rate loans begin to rise.
The Council of Financial Regulators decided at its December quarterly meeting that it was too early to determine the impact of increasing the serviceability buffer from 2.5 percentage points over the loan product rate now applied.
However, they are keeping a close eye on the housing market as a whole.
ANZ will report November lending statistics this coming Friday.
Loans for housing are expected to have risen 2% in November, according to analysts at AMP Capital.
For the 12th month in a row, investor demand for mortgage loans increased to levels not seen since April 2015’s all-time high.
Although first-time homebuyer loans dipped for a ninth month straight, they dropped by a whopping 16 percent for the year.
The cost of a home is increasing rapidly.
House prices throughout the country grew 22.1 percent in the calendar year 2021, with a median value of about $710,000, according to CoreLogic statistics.
There has been a 25.3 percent year-over-year increase in Sydney’s property values, which is higher than the 15.1 percent increase in Melbourne’s.
Hobart saw the largest price increase of any capital city in 2021, rising 28.1%.
Overall, capital cities saw a 21% year-over-year growth, while regional areas saw a 25.79% increase.