Spending on property increases in Australia

Home loan affordability in Australia has increased, claims research

Gross spending on housing finance in Australia was $20.3 billion during the month of February, an increase of $1 billion, according to the latest PRDnationwide Quarterly Economic and Property report.

It also found home loan affordability had increased giving home hunters a reprieve and Australian property conditions are once again luring investors.

‘On average, Australian households now need approximately 32.9% of the family income to service their home loan,’ said PRDnationwide research director Aaron Maskrey.

Maskrey said 33.9% of the property market is now investor financed and is expected to increase as rental yields across the nation continue to become more attractive.

The research director, said declines in property values were expected to slow over 2012.

‘Looking at the macro level property market, the reality is that the rate of decline in values have slowed and could be even stagnant,’ he explained.

‘Investors could now be tempted back into the property market as the rate of decline in values erodes away, while the equity market remains not only turbulent, but has provided returns inferior to fixed bonds over the past five years,’ he added.

Maskrey pointed out that for the month of February 2012, investor financial commitment increased by $400 million to a record $6.9 billion.

Meanwhile, in New Zealand there are more mortgagee sales. The latest figures from Terralink International shpw there were 2,265 mortgagee sales during 2011, below the record of 3,024 in 2009 and 2,434 in 2010, but numbers began to rise during the second half of 2011 and have remained high since.

‘Looking behind the numbers, we see the proportion of individuals with a single property facing mortgagee sales increased in 2011 to 22% of mortgagee sales,’ said Terralink managing director Mike Donald.

This was up from 19% the previous year and equal to the record high for individuals in 2009. Donald said it was more than likely these sales were for family homes, not rentals or investments.

This year’s figures were also looking grim, with preliminary figures for January and February showing mortgagee sales significantly higher than for the same period last year.

‘What we’re looking for is a sustained downward trend. Right now we’re experiencing the opposite,’ added Donald.

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