Average Australian Mortgages Rise

4 December 2009

Australian mortgages have increased just as quickly as home sizes after the Australian Finance Group released figures showing that the average Australian mortgage has climbed 6.4 per cent since May 2009. This equates to a figure of $367,000 for the standard mortgage for the month of November. While this is a significant increase, it is counteracted by a fall in the sales of overall home loans for the same time period. Home sales declined in November to 6,541 which equates to 8.36 per cent.

The month of November saw a yearly record for Australian mortgages with 33.8 per cent, attributing to the impending deadline of the First Home Buyers Grant, although the actual number of first home buyers that were buying into the Australia residential market had slipped, according to the Sydney Morning Herald.

The Australian Finance Group released a report concluding that while the homes being bought and the market conditions are requiring larger mortgages, the actions of the reserve bank of Australia and interest rates was also discouraging many potnetial buyers.

Mark Hewitt, AFG general manager of sales and operations, stated that the two forces were counteracting each other, with the Reserve Bank of Australia responsible for the majority if the decline.

';';Larger average mortgages and greater activity by investors are usually the signs of a confident market,
';';October and November are seasonally strong months in the calendar, but we've seen two straight months of decline.'' Mr Hewitt said in a statement.

In the last 24 hours the Reserve Bank has raised the official interest rate by a further 25 basis points, the third time in as many months, adding an extra $140 per month to an average $300,000 mortgage.

';';In our view the RBA has gone too far in ratcheting rates back up again,'' Mr Hewitt said. ';';Yesterday's unprecedented third monthly rise will do nothing to encourage ordinary families back into the property market.''

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