Large falls in mortgage applications is surfacing among mortgage brokers suggesting not all is well in the housing market.
The Loan Market Group has indicated home loan approvals have fallen 40 per cent from its peak in 2009. LMG has recorded its slowest month since January 2006.
But falls of this magnitude isn’t isolated to the Loan Market Group. Last week, AFG, Australia’s largest mortgage broker with 10 percent of the market announced it had sold $1.5 billion worth of loans in January, down from $2.9 billion in September 2009. The 47% fall comes after four consecutive monthly falls. AFG said it was the worst January since 2005.
» Demand for home loans ‘dives in January’ – Yahoo 7, Friday 5th February 2010.
» Mortgage market under pressure as rising rates spook buyers – Sydney Morning Herald, 1st February 2010.
» 47% Slump in Mortgage Sales : AFG warns RBA on another rate rise – AFG, 31st January 2010.
It certainly is an interesting time for RE. Personally, I would like to see a market correction in Australia towards more affordable pricing (I will buy in Sydney, should a correction occur, or move on perhaps). The ‘sick side’ of me is interested in prices going up dramatically from this point. If prices keep rising, this should hinder consumerism and the affordability of raising children for those without mortgages or home ownership. Obviously, the puppets in the Govt of the day will prop housing at all costs. It’s going to be interesting seeing the rabbits being pulled out of the hat. Either way, I’m happy to watch in interest, yeah, anything but a stagnant market will do from here on in.
Wealthy immigrants are the future for Australia.
Government reliance on “Wealthy Migrants” may not be the answer – Wealthy migrants are very able to choose where they migrate to, and Oz isn’t the only “desirable location”.
Wealthy migrants EXPECT services and accommodation commensurate with what they are expected to pay – not just “a nice view of Sydney harbour”. Australain infrastructure investemnt has been consistently very poor, and with worldwide reporting everyone with ‘Net access knows just how bad we are at resource management (record droughts in one half of the country, record floods in the other half – next week, the opposite pattern). Add to this inadequate road services, indifferent public transport (bus & rail), already stretched Healthcare infrastructure, and World record housing costs Oz is not that great attractant that us locals might like to think – in fact the opinion in Europe is that Australia isn’t that great a place, the people are dogmatic and boorish, and the police forces are corrupt and heavy-handed.
Reliance on useful (not necessarily wealthy) migrants might make more sense, however they too can read the news on the “net, and anyone coming here of the calible Mr Rudd “expects” will be very able to make their own decisions – there are pleanty of English speaking countries out there with better weather, better infrastructure, and better attitudes to “outsiders” that Australia, and rather than being able to pick and choose, Australia in fact will have to compete for the attention of the best on the International Jobs Market – and I’m afraid witih the recent reporting of “Curry Bashing” in Melbourne, we’re not as attractive as we seem to think, exept maybe to aged Brits with money, but they seem to have now chosen the Costa Del Sol as a preferred destination (cheaper to fly home to visit I suppose!)