Consumers To Reap Rewards From Banks Woes

A report recently released has shown that home buyers can still expect mortgage discounts to continue next year as the big four banks continue to fight each other for a bigger share of the slow lending market.

The price war between the big four banks will hurt the non bank lenders and will cause less competition for the market.

In a report recently released by the Deloitte Australian Mortgage it was stated that lenders would try to maintain revenue by offering additional products such as financial advice and insurance to their customers.

According to James Hickey co-author and partner at Deloitte, new mortgages were at their lowest level of growth in 20 years, and that growth in the $1.2 trillion Australian mortgage market of less than 6 per cent a year will be the "new normal" for the foreseeable future.

Mr. Hickey further added that the price war would continue in the short term and that consumers were still getting a good deal on their home loan.

The report also indicated that boom levels of 15 to 20 per cent a year that took place in the 1900s and 2000s would not be repeated.

Continuation of low unemployment and lower interest rates and improved property prices are seen as key elements to getting buyers back into the market. It has also been predicted that house prices would be flat by up to five per cent in 2012.