A business analyst has claimed mortgages are a sector set to soar in the next 12 months.
A new report from business information analyst IBISWorld has identified the mortgage industry as one poised for strong growth in the year ahead. The company forecast 9.6% revenue growth for the industry for 2014-15, and said a number of factors were set to drive growth in the year ahead.
"Over the past five years, mortgage lenders have significantly increased their residential mortgage portfolios in line with growth in demand for dwellings around the nation, particularly in the capital cities. IBISWorld has identified this increase as being driven by favourable lending conditions, declining interest rates and a suite of government assistance packages designed to help boost demand for residential property," the report said.
While demographic shifts in demand may be occurring, IBISWorld general manager Daniel Ruthven said demand for housing would remain strong in 2014-15.
"For many, the Australian dream of the quarter-acre block still exists. While most will be enjoying a smaller acreage, faith in owning a home remains strong across a broad range of Australian demographics, including new migrants and members of generation X trying to get into the property market," Ruthven said.
Though the mortgage market is predicted to outperform most other industries, IBISWorld predicted its growth would be outstripped by superannuation funds management services. The analyst forecast the sector to increase by 10.5% over the next 12 months.
"Our expansive superannuation system is delivering strong returns for both holders and the funds themselves. Compulsory contributions increased at the beginning of 2013-14, further driving the amount poured into superannuation. This has been coupled with strong returns in the financial markets over the past five years, bolstering consumer sentiment and allowing for some increase in the demand for investment options carrying greater risk," Ruthven said.