95% mortgages to come roaring back in Australia: Pete Wargent

Pete WargentDecember 7, 2020

Gosh. And we wonder why property markets 'cycle'? Attitudes to credit are so short-lived it never ceases to amaze.

Over in Britain, after a housing bubble was in part responsible for blowing up the economy, then a mere 5 years later plans were afoot to intervene and re-inflate the market with easy credit and effectively zero interest rates.

Here in Australia, lending standards never declined quite to the same extent which is evident from the relatively low level of non-performing loans.

We didn't have the same spike in unemployment here either which also clearly helped.

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Heck, in England it was possible to take out 105% LVR loans - a bonus 5% to undertake renovation work! - no wonder the market went nuts.

Yet credit did tighten in Australia between 2008 and 2010 quite markedly with lenders tending to require at least a 10% deposit on most property purchases.

Not so any more. Check out the latest stats:

 "Analysis by Rate City shows 70% of the 2,800 home loan products on their data-base are now allowing deposits of 5% or less. This proportion was 86% during 2008 & fell back to 49% in 2010.  Looser credit will fuel a strong residential recovery during 2014.  Borrowers were warned about borrowing too much.  Commsec – among others – expect interest rates to rise in the last quarter of calendar 2014."


Pete Wargent
is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.

His new book 'Four Green Houses and a Red Hotel' was released on 1 September 2013.


Pete Wargent

Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.

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