 Lending limits reduced
First home buyers may now find restrictions on lending limits, as all major Australian banks move to reduce maximum home loans. Deutsche Bank research shows that tightening lending and lower interest rates has resulted in more people comparing rates.
Six banks are reported to be cutting their maximum borrowing limits, with a significant reduction witnessed between November 2008 and April this year. ANZ, NAB, Westpac, St George, BankWest and Bendigo and Adelaide Bank have reduced their maximum home loan rates.St George was found to have reduced its highest rate by $55,000, while Westpac saw a reduction of $33,000.
The Housing Industry Association and Commonwealth Bank First Home Buyer Affordability Index says new homes are more affordable for first home buyers.
However, a new poll has found that as many as one in five first-home buyers may struggle to repay their mortgage.
Research carried out by Datamonitor shows that 21 per cent of people who recently bought a home believe they may have some difficulty over the next five years. Many first home buyers may be snapping up home loans in droves, and packing out auction houses, but concern is growing that many are signing mortgages they cannot afford to repay.
Therefore, lending limits by the banks could be seen as a positive move, but first home buyers are still dominating the real estate market, closely followed by investors.
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