Australian Homebuyer Confidence Hits Lowest Since 2008Nichola Saminather
Australian homebuyer confidence fell to the lowest level since 2008 as concerns about job security outweighed historically low interest rates and improved affordability, according to Genworth Financial Inc.
The bi-annual Genworth Homebuyer Confidence Index declined to 93.4 in March from 98.4 in September, the Richmond, Virginia-based insurer, which provides lenders’ mortgage insurance in Australia, said in an e-mailed release today. The proportion of borrowers who expect to face difficulties repaying their home loans in the next year rose to 27 percent this month from 19 percent in September, it said.
While Australian employers added the most jobs in almost 13 years in February and the economy expanded 3.6 percent in 2012, business confidence and home-loan approvals declined, illustrating continuing concerns about the nation’s economic outlook. Home prices across Australia’s eight state and territory capitals rose 0.3 percent in February from a month earlier, the RP Data-Rismark home value index showed.
“Australian consumers are viewing the housing market with caution, due to a reduced willingness to take on debt in favor of paying off existing debt,” Bridget Sakr, Sydney-based chief commercial officer at Genworth, said in the release. “While both aspiring and current homeowners are concerned about job security, recent Australian Bureau of Statistics data shows that forecasts of rising unemployment have failed to materialize.”
First-home buyers were the most pessimistic, with the Genworth index falling to 85.9 in March from 98.5 in September, and 41 percent of recent purchasers expecting difficulties repaying their mortgages over the next year, up from 18 percent six months ago.
New South Wales state, with the most indebted homeowners, had the largest decrease in confidence with a 5.7 percent drop since September, Genworth said. About 31 percent of borrowers spend more than half their incomes servicing debt, it said.