As the red hot housing market continues to bubble away, the latest ANZ-Property Council Survey shows sentiment in the property market has reached a new high.

"The combination of record low mortgage interest rates and targeted stimulus is clearly supporting the housing sector, where confidence is now at record levels," said ANZ Senior Economist Felicity Emmett. 

"Price expectations are at all-time highs, while the HomeBuilder scheme, along with state and federal government initiatives, has brought forward a large chunk of demand.

"This has more than offset the impact from low population growth and elevated unemployment."

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner-occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
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5.99% p.a.
5.90% p.a.
Principal & Interest
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6.14% p.a.
6.16% p.a.
Principal & Interest
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Confidence in the residential property market has now surpassed the 2013 peak, while the outlook for house prices also hit a record high amid the booming market, which recently saw prices rise at their fastest rate in 32 years.

Expectations for price rises reached record highs across all states after national house prices rose 2.8% in March - the strongest gain since the late 1980's. 

"Our view is that housing prices will rise around 17% through 2021, helped by ultra-low mortgage rates, which have trumped factors like low population growth and elevated unemployment," Ms Emmett said.

Speaking at a Parliamentary hearing in Canberra today, Commonwealth Bank CEO Matt Comyn said the bank has upgraded its property price forecast.

“We were thinking 8%, and we are now thinking 10%,” Mr Comyn said.

ANZ had recently upgraded its price forecast to a 17% national increase in 2021 from 9% in a previous prediction.

Australians wary of further house price rises

General housing confidence might be high, but buyers waiting for house prices to come off the boil are becoming increasingly worried that they may continue surging, leaving them locked out of the market.

Yesterday's Westpac-Melbourne Institute of Consumer Sentiment found the 'time to buy a dwelling' index plunged 7.9% in April, and now sits 18.8% below its recent November peak.

"Buyers appear to be discouraged by the recent surge in prices and implications for affordability," Westpac Chief Economist Bill Evans said.

Westpac also identified a widening divergence between owner occupiers and investors.

"Owner occupiers are likely to be more sensitive to affordability rather than prospects for capital gains which usually drive investors."

But despite the signs pointing towards the property market soon reaching a tipping point, Westpac expects the Reserve Bank will maintain its current policy setting at its next meeting on May 4 and potentially until 2024.

The Reserve Bank has repeatedly said it expects to hold the cash rate steady until at least this time, and Westpac also doesn't believe the RBA will announce any immediate intentions to intervene in the housing market.

"Westpac expects that approach to change by the middle of 2022 as the authorities respond to further increases in prices and a likely lift in investor activity – in line with the signals emerging from this month’s survey," Mr Evans said. 

Despite no planned change in the cash rate, some lenders have already begun hiking variable home loan rates and some fixed rates as well

Adelaide Bank recently increased the variable rate by 15 basis points on its loans for owner occupiers paying principal and interest (P&I) with a loan-to-valuation ratio (LVR) of up to 90%.

The bank also increased the variable rate by 20 basis points for investors paying P&I with LVRs up to 90%; and increased the variable rate by 10 basis points for investors making interest-only repayments with LVRs up to 80%.

Photo by Jasper Bennett on Unsplash

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