The recent interest rate rises have prompted property owners to shop around for the best mortgage deal, with the number of borrowers refinancing growing by 6% between December 2007 and January this year, according to the latest data from the Australian Bureau of Statistics.
Over the past three months, refinancing has risen almost 22% to an eight-year high.
A record number of borrowers refinanced loans in January to free up spending power, and no doubt the rate hikes in February and March prompted even more borrowers to make a beeline for the banks to negotiate the best possible deals.
The recent sharp declines on the share market are also causing more investors to shift their attention to property, and there are compelling fundamentals to suggest that property will be more in vogue with investors throughout 2008, despite rising interest rates.
Reported b y Commsec, the value of new housing finance commitments rose by 3.7% to $23.2bn in January – the biggest gain in seven months – while investment loans rose by 8.3%, and owner-occupied loans rose 1.7%.
The number of new owner-occupier housing loans rose by 2.3% in January, but was largely influenced by more people refinancing loans.
The proportion of first homebuyers declined to 18% from 18.4% while the average loan fell by $4,500 to $233,900.
Bank dominance of the mortgage market is at a level not seen in over 12 years, with Westpac recently having purchased the RAMS portfolio. This will no doubt be the first of many as non-bank financial institutions increasingly struggle to maintain their share of the mortgage pie.