Home-buyers return to lending
The mortgage market is set for a strong start this year as first home buyers take their biggest step towards lending since February 2010, according to new data from RateCity.
The mortgage comparer stated that low property prices, two consecutive interest rate cuts and substantial discounts by lenders have all helped to attract home buyers back into borrowing, with first-time borrowers once again making up 20 per cent of the lending market.
According to a recent report from the Australian Bureau of Statistics (16 January 2012), the number of approved mortgages in November rose by 1.4 per cent to 46,953.
Correspondingly, RateCity reported an increase in home loan comparison activity on its website over the past six months, which rose by 41 per cent from July to December 2011.
In addition, home loan applications on the financial comparison website jumped 23 per cent for the first three weeks of January 2012 compared to January 2011.
"This year, the mortgage market looks set to recover from the past two years of slower growth," said RateCity chief executive officer Damian Smith.
While there is yet to be a strong showing of home buyers matching five years ago, lenders are likely to see business improving this year as borrowers react to lower prices and interest rates, Smith said.
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