Home loans customers may need to prepare for price hikes

House prices could be set to increase, which may impact on people searching for low interest home loans.

Although commentators predicted that the roll-back of the First Home Owner Grant at the end of this month will see a drop in demand, some now claim people with superannuation savings accounts may step in to fill the gap.

The Daily Telegraph reports firms have seen a rise in inquiries relating to super funds potentially being used to finance the purchase of investment properties.

Steven Keen, professor of economics at the University of New South Wales, says even a fraction of the money stored in such accounts could boost the market.

"Given that these funds can borrow up to 80 per cent of the property’s value and they currently contain more than $300 billion, an extra $5 billion a month into the property market would be no sweat," he asserts.

Meanwhile, a recent study from the Loan Market Group showed that one in five people may not be able to afford their home loans repayments if predictions regarding a potential interest rate hike before Christmas are correct.

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