Home loans in Australia are still in demand despite the fact that the interest rates are increasing. Inflation is currently ruling the country. The CPI or the consumer price index for the quarter (December), manifested a rise of 3% plus. This is reckoned to be more than the “comfort level” prescribed by the Reserve Bank of Australia or RBA.
Home loans in Australia is a measure of various activities occurring in the residential real estate market in the country. The country has witnessed a series of escalations in the mortgage interest rates over the years. Australia witnessed another rise in interest rates during the month of August, 2007.
Despite the rise, people have not stopped from availing “owner occupied” home loans in Australia. According to Australian Bureau of Statistics, there was an increase of 1.6% during the month of August, which took the total amount of home loans in Australia to $15,315 billion.
In contrast to this, many economists had anticipated a rise by 1.1% pertaining to the home loan numbers in the country. All this is taking place despite the fact that the interest rates have been rising over the years.
This consumer confidence lies in the fact that the Australians are not worrying about their repayment plan as rate of employment in Australia is healthy. But the main cause of concern is rising inflation in the country and to adjust to increasing inflation, the Reserve Bank increases the interest rate from time to time depending on the requirement.
Few economic experts are of the opinion that more than worrying about the escalation in interest rates, inflation has to be curtailed.
Home loans in Australia are provided by the following types of financial organizations:
General government enterprises
Credit cooperative societies or credit unions
Life insurance companies
General insurance companies
The RBA is faced with the pressure of cutting down on prices. As of 19th January, 2008, the Australian dollar was trading at 90 US cents. This it was assumed was assisting the country from succumbing to credit crunch around the globe resulting from US subprime mortgage crisis.
Last Updated on : 24th August 2013