According to Bloomberg, the Australian Genworth Homebuyer Confidence Index has declined to 93.4 in March, down from 98.4 last recorded in September 2012.
Despite lower interest rates, the number of borrowers who expect to hit mortgage repayment difficulties in the next year has spiked to 27 per cent in March 2013, up from 19 per cent in September 2012, the last time the bi-annual survey was conducted.
The story is even worse in the first home buyer segment. The confidence index for this segment now sits at 85.9, down from 98.5 in September. The number of first home buyers expecting to have trouble repaying their mortgage has surged to 41 per cent, up from just 18 per cent in September.
The cause of the lower confidence at a time of record low interest rates is thought to come from deteriorating job security.
These latest results from mortgage insurer Genworth, goes against the grain of both sentiment portrayed by real estate professionals and current unemployment data.
» Australian Homebuyer Confidence Hits Lowest Since 2008 – Bloomberg, 27th March 2013.
h/t to Jj for the link.
I think you mean sentiment portrayed *
Thanks for bringing this to my attention 🙂
I have little sympathy for home buyers who pay the ridiculous prices for any home today. That is what happens when they prefer to fall for the government-banks-real estate conspiracy of hyping up home prices instead of relying on intuitive fore-planning and research. They have no one else to blame but themselves. They fully deserve the difficulties they are now today and in the future.
I have been saying his all a long. When the job market stops the housing market will crash. The China boom is coming to an end. Australia better hope China doesnt crash. It will be interesting to see what effects Europe is going to have on Australia.
When Australians cant service their debts then the banks are going to be in real trouble. I am predicting that before its all said and done one of the big banks will go under. Then when the govt has to take on all that debt from the banks then Australia wont look like the lucky country.
LBS
The night will come when Alan Kohler will be praising the virtues of our banks on his nightly reports as their share prices continually break their record highs, then in the morning we will wake up to Kochy in tears on the Sunrise show telling us that one of the big 4 has just collapsed.
My bet it will be Westpac.
@admin – More evidence of the ‘recovery you have, when you are not having a housing recovery’. particurally in Melbourne, but I feel can also apply over here in SA.
http://www.theage.com.au/business/sellers-having-to-cut-house-asking-prices-20130328-2gw2m.html
With Australian Banks leveraged at around 26.5 times (Same as Lehman Bros) a 4% loss in asset values would wipe out their capital. With 27% of mortgagees expected to have difficulties in the next year…… Do the maths
This is what the Australian govt should be getting nervous about. If China goes through a debt crisises bye bye mining. Then the Aussie govt will really be bailing out th banks and people.
http://www.theepochtimes.com/n2/china-news/chinas-debt-crisis-looms-economists-say-369183.html
Tha gov do same as they did in 08 when bankwest fell to it’s knees pump money in to them I would be more worried about the community bank. The gov will kick them to curb like a trash can.
I’ve lost my job twice in the last 2 years and I’m fairly well experienced in the IT industry and on both occasions didn’t see it coming. Thank God I didn’t have a mortgage.
It took me 3 months to find one job and am still looking now. My colleague in Brisbane took 9 months last year to get another job and the other one in Melbourne took 6 months to find one.
The company I have just left is not replacing people as they leave, and we fell short of our targets last year, even when they were revised down.
Companies are cutting their spending and costs to maintain profits – and the quickest way to do that is to reduce headcount.
Watch out for 2014.
@11. Not Spending,
Similar situation to me and many others I know. I was in I.T as a programmer from 1994; VB, VBA, C#, HTML, CSS, JavaScript, jQuery, PHP, T-SQL, PL/SQL,… All the good stuff, as a contractor. It served me well. When I felt ready to purchase property (around 2002), I took a good look around me, what the situation was like before 1996, and backed off big time. Never regreted it.
Anyway, 2010-2011 was the last I saw any contracts to this day. If I had a mortgage I’d be up the creek (you know which one too). I experimented with and started up a business, and have my fingers in another. I know many programmers, met them over the years gone by (so damn quickly too, years aren’t long enough!), since 2009, some lost their jobs for various reasons, it took some 9 months to attain work again, some 18 months, some were not able to get back into I.T. This has been happening in I.T for the past 4 years now. Since 2 years ago, other professions have been whacked with the same curse.
The watch out period started 2011, in my useless but humble opinion.
For the past 13 years I was the butt of everyone’s remarks for not buying into property, I have no sympathy for those same people now, and I don’t feel lucky I’m not in their position.
My brother-in-law is house hunting again. Caved in after just 5 years of renting. Thing is he knows better, but the siren song of home ownership is just too strong. If history is any guide closing the deal on a new place probably means the fix is in for house prices, since even he admits he always seems to buy at the top. Only all the mad money printing that’s taken place since 2008 saved his hide from the consequences of a disastrous mortgage, which took 4 years to ride out from the paper loss. I don’t think he’ll be as lucky next time.