Employment Worries Keep Mortgage Stress High

Mortgage stress is on the rise as Australians worry about losing their jobs.

The latest Genworth homebuyer confidence index, which tracks the mood of people who own or are thinking of buying a property, found nearly a quarter of those with a home loan had problems meeting repayments.

The result was up from 18 per cent six months ago, and reflects increasing concerns about unemployment and job security, Genworth chief commercial officer Bridget Sakr says.

“There is uncertainty from a local and global perspective,” she said.

“Unemployment and underemployment is what is driving that concern.”

Ms Sakr said worries about either job losses or reduced hours at work, as well as cost of living pressures, had a bigger impact on borrowers than falling interest rates.

This caution was also reflected by the proportion of respondents who were comfortable borrowing more than 80 per cent of the value of a property falling to 28 per cent, from 32 per cent.

Overall, the homebuyer confidence index tumbled 5.1 per cent in March to its lowest level since 2008.

A key reason for the overall decline was the sharp fall in confidence among first home buyers.

The report said it has been a particularly difficult period for first home buyers, with their participation in the market down to their lowest level in eight years.

The survey found half of potential first homebuyers believed now was a good time to buy a property, compared with 54 per cent in the September survey.

The decline followed changes to the first home buyers grant in NSW and Queensland, which now only applied to new dwellings.

Director of research firm RFi, Alan Shields, said the survey found fewer than one in four prospective first home buyers preferred to buy a new property.

“The incentive is leading them towards a property that tHicks Real Estatee quarters of them don’t necessarily want,” Mr Shields said.

The Genworth survey of about 2,000 adults was conducted by RFi.

Story by AAP, Story source: www.ninemsn.com.au