Homebuyer confidence falling

By Reporter 28 March 2013 | 1 minute read

Homebuyer sentiment has decreased by 5.1 per cent since September 2012, according to the latest Genworth Homebuyer Confidence Index.

Despite the official unemployment rate holding steady during the past six months, borrowers’ fears around job security contributed to a fall in the index from 98.4 to 93.4.

According to Genworth, the fall was primarily driven by a 42 per cent increase in the proportion of borrowers who expect to experience mortgage stress over the next 12 months.

Bridget Sakr, chief commercial officer of Genworth, the results show Australian consumers are viewing the housing market with caution due to a reduced willingness to take on debt in favour of paying off existing debt.

“They have felt there is an increase in mortgage stress, primarily because they have a concern around job security, whether it’s unemployment or their hours being cut or redundancy,” Ms Sakr said.

“There is also an increased proportion of borrowers who have been surveyed who are not prepared to borrow on more than eight per cent. So there is that concern about not getting into too much debt, and there is concern around their current debt and whether they can continue with the arrangement.

“I think the first home buyer market has really felt the impact, the confidence level came down by 12.8 per cent, and that impacted the overall confidence levels. The government has played a pretty big part in that with their first home buyer grants being removed in some states, so that’s had a big impact,” she said.

RELATED TERMS

Unemployment

Unemployment occurs when a skilled worker or a professional who wants to work is unable to find jobs.



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