Residential Property Account For 60% Of Bank Loans

Global ratings agency Standard and Poor has warned Australian Banks on high credit exposure after a recent report shows 60% of loans are allocated for residential property. S&P has warned banks that the high unemployment rate and slow economic growth might catch up and affect future mortgage repayments. Mortgage lending has surged throughout 2013 as the nation experienced a 10% increase in house prices.

Banks are advised to be aware of these market conditions as future interest rate hikes can become a problem, especially those that have recently entered the property market. Although Australian banks typically have interest rate buffers to accommodate rising rates, repayments may still be affected as a slower wage increase can be an issue for some households.

Read more about this on the Australian website.

Author: Dorian Traill

Dorian Traill is the current Director of Grand Capital Finance Group and Fountain Property Group. He specialize in home loans for people as well as helping them build wealth through quality investment properties that ultimately lead to long term financial freedom.

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