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Increase in home loans could be on the horizon

Banks are reducing their standard variable rates for home loans in response a decrease in activity within the housing market.

A recent survey of 400 builders and constructors has revealed a decrease in revenue and wages within the industry as a result of dwindling home purchases.




In response, Master Builders Australia chief economist Peter Jones is urging the government to increase the first home owner's grant, even if only for a short period, whilst also bringing forward civil works in order to jump-start the country's construction sector.




The group's National Survey of Building and Construction was released today (January 21st), and has revealed deteriorating conditions within the industry, with decreased activity recorded during the final three months of 2012.




However, while the government appears to be hesitating over calls to cut interest rates, a number of banks are now taking it upon themselves to help people onto the property ladder by reducing their own standard variable rates for home loans by up to 0.29 percentage points, Australian Property Investor reports.




The decrease in activity within the housing market has led banks to offer increasingly competitive rates as they struggle for a greater market share among what appears to be a continually shrinking pool of house buyers.




The best rates are therefore being offered mainly to new customers, which is why anyone looking for a home loan may wish to consider switching to a new bank in order to take advantage of these competitive introductory rates.



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