Conflicting signals on home loans
Finance experts cannot agree on the health of the Australian property market, potentially making it very confusing for those looking for a new home loan.
According to data from the Australian Bureau of Statistics, the total number of home loans taken out in April rose for the first time since December 2010.
RateCity chief executive Damian Smith interprets this as a sign that borrowers were more confident than a few months previously.
He thinks home buyers are slowly moving back into the market but other financial analysts say the housing market is still in the doldrums.
A competitive mortgage market is good for home buyers and lenders are now offering mortgage products that allow individuals to borrow at least 95 per cent of the value of their property.
Many think the government's controversial ban on exit fees, aimed at giving homeowners more freedom to find cheaper mortgage rates, will actually dampen competition.
However, the Mortgage and Finance Association of Australia (MFA) has argued vociferously that the ban will hurt the non-bank lenders that have traditionally kept interest rates low in the market.
"Banning exit fees will not boost competition among mortgage lenders," said association chief executive Phil Naylor.
But the MFA's own recent survey found the most important factor in choosing a mortgage is interest rates, whereas exit fees were significant for only 1.7 per cent of respondents.
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