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Date Published : Tuesday, February 12, 2008
Home loan debt throughout Australia unexpectedly increased during December, despite increasing house prices and higher interest rates, federal government figures show.
According to the Australian Bureau of Statistics (ABS), home loan debt reached $700 billion during the last month of 2007, up 0.1 per cent on November. Economists had predicted a fall of at least one per cent.
The continuing demand for homes across the nation resulted in over 65,000 home loans being granted for owner-occupied housing in December, up 700 on the previous month.
Despite the continuing fluctuating of interest rates, the majority of Australians taking out mortgages choose variable rate home loans, with fixed rates only accounting for 23.5 per cent of those taken out, news.com.au reports.
Homeowners in the Australian Capital Territory have the largest home loans of any households, with the average in the state hitting $266,600 during December. The national average came in at $238,800, while homeowners in Tasmania have an average home loan worth $165,300.
A report by the Reserve Bank of Australia has suggested that interest rates may be increased again in March, if house prices and demand for home loans show no sign of stopping.
"If it is not reversed reasonably quickly, the recent pick-up in inflation carries the risk of generating an upward drift in inflation expectations, which could feed back into wage and price setting behaviour", the report stated.
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