Cost of living and interest rates are big concerns for 2011

Pressure from rising utility prices is the biggest concern for consumers heading into 2011, a new survey from Mortgage Choice shows.

The annual consumer sentiment survey, found 27% of respondents worried about the cost of living, compared with 17% a year earlier.

Interest rates dropped to second place as the biggest concern with 16%, down from 19% cent in 2009.

However, the survey was conducted prior to November’s surprise rate increase by the Reserve Bank and extra increase by the major bank lenders.

“The move would’ve been a great disappointment to the nine per cent of mortgage holders surveyed who said that they couldn’t afford any rate rises before considering selling up,” Mortgage Choice‘s spokesperson Kristy Sheppard said.
But one in five said they could afford rate rises over five percentage points.

Despite worries over rising interest rates, more than a third of respondents said they intended to purchase a property within the next two years, while 30 per cent said they would renovate an existing property as alternative to buying one over the same period.

Sixty per cent of those buying a property said they would have to make sacrifices to do so – 84 per cent said they would cut back on spending, 50 per cent would miss out on an overseas trip and 35 per cent would purchase a less expensive property than desired.


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