A two-punch combo of lower interest rates and rising consumer confidence means brokers could face a knockout year in 2012.
According to Loan Market, the challenging conditions of 2011 are being swept aside by positive changes in the lending landscape.
“The year ahead looks quite promising with the likelihood of interest rates continuing to head down and lender risk appetites growing,” said Loan Market corporate spokesperson Paul Smith.
“The Melbourne Cup day rate cut by the Reserve Bank of Australia (RBA) was a turning point for the market and the follow up December reduction will help boost activity over the summer.”
Economists are predicting the RBA will make further cuts to the official interest rate when it meets again next month, giving borrowers greater relief.
The natural disasters in Queensland and Victoria at the start of 2011 stalled market activity, while the introduction of the carbon tax curbed consumer confidence.
Consumer fears were also heightened by speculation that the RBA could raise rates to combat inflation. However the financial situation in Europe and the US forced the RBA to reconsider such action.
Despite ongoing uncertainty over the European debt crisis, consumers are more upbeat than they were in 2011, Smith said.
“The fundaments of the Australian economy remain quite strong and there are plenty of opportunities for the service, manufacturing and primary sectors to grow and succeed in 2012.”