by Lisa Montgomery

WHAT’S IN STORE FOR 2011

Leading non-bank lender, Resi Mortgage Corporation, says several trends are set to emerge among borrowers for 2011 including more demand for part-fixed mortgages, greater discipline with credit and a growing number of Gen Y’s staying in the parental home for longer in a bid to buy their own property.

Resi’s CEO, Lisa Montgomery, says the rising rate climate of 2010, changes in lending criteria and a tight rental market will all continue to play their part in contributing to new borrowing patterns in the year ahead.

She says: “Even now we’re starting to see evidence of what is largely a combination of those events starting to impact borrower behaviour and property prices in the major markets.”

The year ahead has already been predicted by some as one of some uncertainty in relation to interest rate movements and property values, so Montgomery says early trends are proof positive that Australians are definitely more savvy and cautious than they were even five years ago.

Montgomery says recent enquiries are already pointing to increased demand for part-fixed mortgages next year as a number of borrowers look for some certainty around their mortgage repayments.

She says: “By planning to fix only part of their loan they can do something to address concerns they have around further interest rate rises over the next twelve months, while still retaining some balance between fixed and variable rates.”

“In addition to that, greater discipline with credit, but particularly credit cards, also appears to be a developing priority for many over the next year, in what is a very positive trend,” says Montgomery.

She explains: “We’re hearing from more borrowers wanting to talk through strategies to pay down debt so they can concentrate solely on paying their mortgage, in a concerted effort to not end up in the same over-leveraged position where they may have been prior to the GFC.”

Montgomery also says those Generation Y’s eager to get into the property market are now more cautiously watching rate movements and property values with the added support of their parents – some of whom may have been financially affected themselves by events of the last few years.  

She says: “As a result, more of these potential first home buyers are being encouraged where possible by their parents to live in the parental home for longer - allowing them to save a larger deposit which will make it easier for them to fit within the tighter lending criteria now in place across the board.”

And in relation to Gen Y’s, Montgomery says this category of buyer will continue to be a real focus for lenders who will be developing loan products specifically to help ease them into the property market.

Montgomery says: “If the GFC achieved anything lasting for the mortgage market and borrowers, it was to educate many about the significant impact rate cycles can have on our hip pocket.  Harsh lessons were learnt, but it still hasn’t ruined the fabric of the Australian dream of property ownership.”

ENDS

Media Contact:    Lisa Montgomery, CEO,
RESI Mortgage Corporation: (02) 8204 5012 or 0414 592 553

Karen Bristow - Kardan Consulting: 02 9967 3245 or 0414 320 146

Published on: 1/12/2010

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