The situation in Australia is worrisome to some investors, but other news looks good. Australia lender X Inc Finance says that home loan inquires grew by a huge 50 per cent in the month of January. They expect to see significant growth for January too.
This may seem out of place in a location where interest rates continue to rise. In addition to this, the latest news says that Australia and New Zealand are more costly places to live and buy a home over the US or the UK.
According to X Inc Finance chief executive Jennifer Niesen, as reported in The Australian Business, "December inquires surged with people getting back into the property market after delaying buying decisions during the federal election campaign." And, "Beyond that, inquiries typically surge in January thanks in the main to optimism about the new year just begun."
The lender expects to see January inquiries jump by 30 per cent as well.
The Reserve Bank of Australia is likely to raise its benchmark lending rate in February, and has made significant raises to that rate twice in 2007.
Economists say that this increase in rate of inquiries is surprising yet consumer optimism is high. This comes as a shock considering the skyrocketing cost of buying a home here and the surging energy prices as well. While the Australian economy is still strong, it is likely that inflation will be something that must be battled through 2008.
Several lenders have already begun to increase lending rates, especially variable home loan rates. Since January several of the largest banks in Australia have been raising rates, both in speculation of the upcoming rate increase and out of necessity.
