Baby boomers rush to take out more mortgages

Credit reporting agency Veda Advantage reveals that mortgage applications from the baby boomer market between 44 and 62 years old are up 45% in March 2009 from March 2008.

Veda Advantage New Zealand managing director John Roberts says the statistics show a growing surge of renewed interest in the housing market for the first quarter of 2009.

The amount of mortgages applied for in February increased 37% from January, with March mortgage applications rising a further 29%.

“Today we are experiencing a level of activity in mortgage applications that we have not seen since house prices began falling in late 2007," says Mr Roberts.

"This activity reflects the lower interest rates stimulating demand, and shows the market going to fixed terms to lock in these rates.”

Tighter lending rules for minimum deposit rates are probably responsible for Generation Y (below 28 years old) applications only rising 16% during March 2009 from March 2008.

“The much larger increase in the number of baby boomers applying for mortgages, compared to younger age groups, suggests that they are more cashed up and in a better position to snap up perceived bargains in the housing market,” Mr Roberts says.

Generation X (aged 28-43) mortgage applications were up 34% in March from one year previously.

While the number of mortgages applied for was in March at the highest level since November 2007, house sales have yet to quite catch up.

While March 2009 figures are not yet available, during February 5,228 homes were sold compared with 7,837 in November 2007.