The latest housing finance figures released by the Australian Bureau of Statistics show a surge in the number of fixed loans in New South Wales even though The Reserve Bank is under pressure to drop interest rates even further according to Chris Ford, New South Wales Branch Manager of The Property Club, Australia’s largest independent property group.
Mr Ford said New South Wales home lending figures reveal that the number of dwellings financed through fixed loans during August 2013 surged by 38% compared to the same period last year1.
“A total of 2521 dwellings were financed though fixed loans compared to just 1824 during August 2012.
“In response to marketing campaigns from the big banks to fix, the home lending figures show that the number of fixed home loans in New South Wales began to spike during April of this year and have remained high since then, with an average of 3,000 new fixed loans every month.
“At this time The Property Club is not recommending that property owners fix rates as we believe they will drop even further despite these aggressive advertising campaigns from the banks to fix.
“The RBA is under pressure to drop interest rates to stop Australia’s unemployment rate rising even further with predictions it will shortly pass the 6% threshold. The latest job vacancy figures show that New South Wales job vacancies in the year to August 2013 fell by 5%2. This downward trend in job vacancies is reflected in a national average of a 20% decrease year-on-year.
“Fixing interest rates at the wrong time is one of the most common mistakes property investors make. Many investors, for example, fixing their loans last year at rates above 6% whereas today they can fix at less than 5%.
“Selecting the wrong finance package when buying your first property can mean the difference between success and failure in the property market and that is why this issue needs to addressed very carefully by property investors.