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Connexus : Issue 38
44 connexus www.abacus.org.au FEATURE connexus www.abacus.org.au 44 F irst homebuyers are confident and optimistic about the near future, despite a downturn affecting some sections of the economy, according to a survey. The Genworth Homebuyer Confidence Index September survey found that, although 40 per cent of first homebuyers are using more than half their monthly income to service debt, only 15 per cent expect to have difficulties paying their mortgages in the year ahead. “In fact 58 per cent project they w ill easily meet repayments,” says Ellie Comerford, CEO of mortgage insurer Genworth. Genworth says it’s seen a “slight increase over time” in first homebuyers using credit unions and building societies. and, when it comes to arrears, first home buyers typically perform better than other borrowers. Not giving up on the dream While housing affordability is affecting many potential homebuyers, the Genworth survey found that young australians haven’t given up on the dream of owning their own homes. “Existing debt is a hurdle for some potential homebuyers – almost two- thirds of would-be home owners have some form of outstanding debt, mainly from paying for education and wedding expenses, along with general living costs,” says Comerford. To afford to buy a home, young While property sales and building have slowed, it’s not all bad news. INSURANCE Positive signs on the home front 2007 2008 2009 2010 Mar 2011 Sep 2011 SURvEY YEAR -7.7% +7.7% -0.3% -1.5% -2.0% 105 100 95 90 85 INDEX 2007–100 Mortgage stress drives drop in overall confidence The drop in the Genworth HCI was underpinned by the increase in those surveyed who ‘experienced difficulty repaying their mortgage’ and an increase in those who ‘expect difficulty repaying their mortgage’. Levels of debt and comfort with higher debt levels, as well as ‘good time to buy’, remained relatively unchanged. Source: Mortgage Trends Survey, analysis conducted by RFi (2010 survey conducted by UMR) genworth Homebuyer Confidence Index 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Over 50% of income to service debt Good time to buy a home Comfortable borrowing over 80% LvR Experienced difficulty repaying mortgage Expect difficulty repaying mortgage Sep 2010 Mar 2011 Sep 2011