The growth of consumer credit is rapidly increasing in Australia. Credit card loans and personal loan applications are highly patronized these days. It is quite surprising that the number of housing or property demand is slowly dropping. There is a significant decrease of 2.9% since December and it is expected to drop consistently in the next 9 months. Are people beginning to change their priorities?
House property is one of the best forms of investment. A good property investment could be your best asset in the future. It is one of the biggest ticket purchases that has the potential to grow its market value in the future. But why are people slowly losing interest in the idea of buying property? There are various reasons why some people dismiss the idea of investing in properties. It is no secret that property loans do require a lot of paper work. There is lots of paper work involved in order to comply and the loan term takes forever while consumer credit is accessible and the process is much faster. It demands numbers of years to finish the repayments. People are beginning to change their priorities while some of them are not ready to invest.
Consumer Credit Demands
Consumer credit demand increased to 9.7% since last year. Personal loans increased to 11.9% while credit card loans soared from 1.7%. These figures are based from the quarterly reports from Veda. On the other hand, there is a significant increase of 6% in car sales which drives the increase of personal loan applications to finance their car loan.
The low interest rates and alternative lenders of personal loans and credit card applications seem to be the reason why property investments are dropping. The number of alternative lenders is growing giving people more options to choose from. Loan interest rates vary and consumers can calculate and make favorable choices. Consumer credit serves better interest rates and terms that are pleasing to consumers. Processing time is shorter and requires less documentation. Many are attracted to credit cards because of the rewards and freebies they get every time they use it and earn points from it. They enjoy being rewarded by goods, local trips and other discounts. And besides, everybody needs a credit card to shop for necessities like goods and services. It’s unlike property investments where you have to consult brokers and experts to make sure that you are getting the right property.