Lower Interest Rates Could Support Housing Market

The prospect for lower interest rates is a factor that could support an improvement in housing market activity later this year. While borrowers are facing tougher serviceability later this year. While borrowers are still facing tougher serviceability assessments and scrutiny around their overall debt levels relative to their income and expenses, lower mortgage rates will certainly be a net positive for the housing market.

Mortgage rates are already around the lowest level since the 1960’s and any further reduction is likely to be well received by the market.

According to the ABS, investors currently comprise 27% of the value of mortgage demand (excluding refi’s), down from 43% in 2015 and now well below the decade average of 34%.