Australia’s buoyant property market is set to maintain its solid performance in 2014, even in the face of inevitable rate rises, according to the CEO of a leading mortgage brokerage.
Yesterday at Mortgage Choice’s Interim Financial Results announcement, the company’s CEO, Michael Russell, said despite some recent negative economic news, Australia’s consumer sentiment and property market are now at the point where they can ride out uncertainties.
“There is no doubt about it, consumer sentiment is fragile,” he said. “Recent announcements in the auto industry, speculation that Qantas might be laying off a considerable number of its workforce and concerns over the Australian dollar are impacting our manufacturers hard.
“So we certainly acknowledge that the sentiment is fragile – but we think that there is a lot of good news in the economy as well. Sentiment has been subdued for a long period of time, but Australians pick themselves up pretty quickly. We don’t like feeling gloomy and I think there’s enough good news in the economy to suggest that sentiment should stay quite positive throughout the balance of this financial year.”
Mr Russell said even when rates inevitably rise, lenders will still be hungry for investors’ business, so lending and borrowing should remain healthy.
“The cost of funding has enabled lenders to return to the sort of profitability in their mortgages that they were achieving pre-GFC. Our lender panel at the moment has an insatiable appetite to write mortgages," he said.
“We think that the competition is now that healthy that even if there was a rate rise in the foreseeable future, while consumers won’t react positively to that, we’d suggest that there’s enough positive sentiment in the market to continue to fuel the housing market.”
Mr Russell said he doesn’t like to forecast too far into the future, but he remains confident the rest of the year should be a stable and successful one for the property market.