Warning to Banks Property Prices Driven by Debt

[connaust]

Property boom spurs spending spree. SURGING property prices appear to be driving a spending spree in Australia, with home owners taking out bigger mortgages to help fund the purchase of big-ticket items, from new cars to holidays.....But regulators and economists fear that the borrowing binge could leave home owners vulnerable to rising interest rates, while any sudden reversal of housing prices might tip many into negative equity - when the size of the loan exceeds the value of the property.

 

Big four banks gorge on house mortgages. THE big banks may soon be forced to curb sales of mortgages after a feeding frenzy on housing over the past 18 months has lifted their share of the nation's property market to record levels. Any steps to slow mortgage sales are likely to hit first-home buyers hardest as they are considered riskier and surging property prices have forced them to seek larger loans

 

 

Am sure British are familiar with this situation.....scary.....

[Guest chris955]

This doesn't surprise me in the last, we have the highest level of borrowing in the entire mortgage and it shows no signs of slowing down. Everyone just assumes their houses will just keep going up and up so they continue to borrow on the equity. I am not looking forward to the day it comes crashing down.

[connaust]

Now the real estate industry is complaining..... predicting later in year may be a good time to buy.....

 

Housing market to weaken as buyers retreat. High auction clearance rates and record prices notwithstanding, official figures show the number of loans to buy houses in Victoria slipped from a record high of 15,300 in September to 13,400 in February after sliding in six out of the past eight months. Victoria's slide of 12 per cent is the least severe in the nation. In New South Wales the number of loans slid by 27 per cent and in Queensland and South Australia by 25 and 29 per cent. ''This will lead to a slowing of price growth, no question about it,'' said Real Estate Institute national president David Airey.