Soaring utility bills and fears of an economic slowdown have been big news this year so it is unsurprising that some recent first homeowners are feeling concerned about their financial well being.
A recent Mortgage Choice survey of New South Wales first homeowners who purchased in the last two years found that soaring utility bills and interest rate movements were recent borrowers’ greatest concerns.
Almost one third of the state’s recent first homebuyers said that increasing utility bills was the top concern this year. This comes at a time when the Australian Bureau of Statistics reports utility bills have risen in Sydney by approximately 12% over the year to June.
This rise in utility costs may be impacting first time property owners’ ability to repay their home loan, making now a good time to take a look at your current budget and consider the ways in which you could make savings.
Borrowers who are concerned about the impact of rising utility bills on their household budget could benefit from comparing their outlays online via comparison websites. The same process could also apply to comparing other living costs, such as health insurance, car insurance, etc.
After utility bills, NSW recent first homeowners were most concerned about interest rates. In 2011, almost half of recent first homeowners reported that rate movements were their greatest concern. However, with increased speculation of another cash rate cut by the Reserve Bank this year, this number has fallen in 2012 to only 17% of first homeowners.
It is no surprise that interest rate movements are less of a concern than last year but still top of mind with borrowers. If rates do fall further as many are speculating, it could help homeowners claw back some of the money spent on rising utility bills and other living costs. Any extra savings could be contributed into their home loan to help them save money on their overall loan costs and cut time off their loan term.
Job security was the third most topical issue this year, with the number of concerned first homeowners almost doubling since 2011. The research this year found that more than one in 10 recent first homeowners in NSW were concerned that any further economic slowdown may affect their state of employment.
The survey also revealed that recent first homebuyers had saved longer for their property deposit than last year, as almost two thirds of buyers in this year had saved for two years or more. This is a turnaround from 2011, when the majority (51%) had saved for two years or less.
Recent first homeowners have taken their time to buy. In comparison to last year’s survey results with the majority saving longer for their deposit and more spending an increased amount of time looking for their ideal home.
This trend is likely to be a result of a number of factors, most likely Australians’ growing desire to save and New South Wales buyers’ reluctance to jump into the market quickly when property prices were still falling and further rate cuts were on the cards. I would expect that some buyers held off buying to take advantage of these favourable conditions and used the time to save an even greater deposit!For further information
For more information contact Richard Windeyer on 1800 01 LOAN or click here to "Book a Meeting"