A rising number of Australian home buyers searching for the best loan packages may face growing negative equity concerns.
Lisa Montgomery, Chief Executive at Resi Mortgage, revealed that many providers stopped granting 95 percent home loans during the financial crisis, but they have started up again in the last year.
The decline in the value of homes in the country has raised concerns that loans taken are now higher than the value of the property. Indeed, average home prices in Australia declined 3.5 percent year-on-year in September, while the value of homes fell by as much as six percent.
“Investors who have looked for healthy growth on the Gold Coast, for example, have been particularly disappointed and many are selling at a loss,” said Montgomery.
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