Confidence falls, but borrowers aren't asking for help with their mortgage
New research shows borrower sentiment has taken a sharp downturn.
Borrowers are losing confidence in the property market, with positive sentiment falling in the past six months as four in five borrowers feel either neutral or negative about their financial outlook.
New research shows that overall, borrowers across Australia are resilient in the face of rising prices and cost-of-living pressures, but that consumer optimism is falling away as pressure intensifies.
Most borrowers (79.5 per cent) trying to get into the market feel neutral or negative about their financial outlook, meaning positive borrower sentiment fell 13.7 percentage points in the past six months.
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By continuing you agree to our Terms and Privacy Policy.Interest rates are a top concern for borrowers again, while job security concerns are less of a concern so far this year.
The Market Sentiment Survey, conducted by the Mortgage and Finance Association of Australia (MFAA) shows that the housing market is increasingly fragmented.
Winners and losers
The housing market is increasingly operating as a five-speed economy as borrower sentiment and housing pressures vary significantly across the country according to the survey.
While optimism has weakened significantly in the past six months, that the underlying drivers of sentiment differ significantly by state depending on housing supply, property price growth and household finances.
"Australia's housing market is no longer moving in a single direction. What we are seeing is effectively a five-speed economy across key regions," MFAA CEO Anja Pannek said.
"Borrowers across the country are experiencing very different conditions depending on where they live.
"We see strong optimism in some states, but there are supply constraints and affordability pressures in others, which will only be exacerbated by skyrocketing oil prices," she said.
Uncertainty and caution
Borrowers continue to rely on mortgage brokers to help navigate the increasingly complex landscape, according to Ms Pannek.
"This is great for competition, but it can be confusing for consumers. Brokers help Australians in every city, region and town to navigate complexity and make informed decisions about the biggest financial commitment they will ever make.
"Ongoing global uncertainty, conflict in the Middle East and inflation will likely add to borrower caution. This reinforces the value of mortgage brokers supporting their clients through changing market conditions."
Brokers told researchers that fewer borrowers are seeking hardship-related support, suggesting many households have adjusted to higher interest rates.
The number of brokers who reported being asked 'often' about hardship options have halved over six months, from 33.3 per cent to 16.7 per cent.
While brokers are flat out helping borrowers compare mortgage rates and negotiate discounts with lenders, the survey found that borrowers may now be effectively locked out of refinancing despite wanting to switch lenders.
The survey was taken from 2 February to 27 February and includes the period immediately after the February cash rate rise to 3.85 per cent.
Originally published as Confidence falls, but borrowers aren't asking for help with their mortgage
