The experts are trying to make the mortgage situation in Australia sound all optimistic – they think interest rates won’t rise too much and they suggest that plenty of Australians are still able to cope well with an existing mortgage or to enter the home loan market for the first time. But just because Australia may not have been as badly affected by the global financial crisis as many other countries, that doesn’t mean that mortgages are easy for everyone, as news this week makes absolutely clear.
For example, there is still a large amount of mortgage stress amongst home loan holders in Australia. A story doing the rounds of the newspapers this week cites a Sydney family who is living on rice so that the bank won’t foreclose on their mortgage – and suggests that this family is one of many who are facing difficulties in making mortgage repayments due to rising interest rates,
Added to that are the increasing difficulties faced by first home buyers to actually get the finances together to start up their first mortgage. For example, in the Northern Territory lender associations are saying that the proportion of first home buyers who are part of the real estate market as dropped dramatically – a year ago they were 40 per cent of the clients looking for mortgages and now they make up just five per cent. Similarly, Australian Bureau of Statistics and Residex studies are showing that it now takes longer for first home buyers to save up the deposit for their first home – in Perth, for example, prospective home owners now an average of just under five years to save up a twenty per cent deposit for a first home, which is six months longer than a year earlier.