The rising cost of living is stopping potential home buyers from jumping on to the property ladder, new research has found.
According to a new national survey by Loan Market Group, 42 per cent of brokers felt daily living expenses were the main culprit for a dramatic drop in home loan approvals.
“The key driver bringing down approvals – which latest Australian Bureau of Statistics figures showed were at a 10 year low - appears to be the everyday costs consumers are facing,” Mr Rushton said.
“Many people simply can’t take on home loan credit when they are paying increased petrol and food costs as well as higher charges for utilities such as electricity.”
But despite this, Mr Rushton said the market was being completely pervaded by news of doom and gloom.
He said some respite could be found in the competitive pricing in the home loan market.
“With weaker home loan demand, lenders are having to fight harder than ever for broker business,” he said.
Mr Rushton also pointed out that with rental yields at unprecedented highs, many tenants in Australia are paying more in rent than they would be for a mortgage.
“Some lenders are willing to consider rental payments over a 12 month period as part of genuine savings on a home loan deposit,” he said.