Latest NewsSurge in High-end Home LoansSaturday, 31 December 2016

Interest rates may be rising, but that's not stopping people from dishing out more than $1 million for prestige property, a leading mortgage broker says.

Loan Market says its brokers have seen a 30 per cent increase from people seeking loans in excess of $800,000 in the past year.

"There is strong evidence that the prestige property market is on the move and people are on the hunt for homes worth more than $1 million,"
Loan Market chief operating officer Dean Rushton said on Wednesday.

The increases in official interest rates during the past six months had not deterred people from seeking to upgrade their properties, he said.

"Obviously interest rates are coming back up from a near 50-year low, so they are well below where they were only two years ago.

"There is confidence out there about both the direction of the Australian economy and the housing market, which is encouraging those with financial stability to upgrade their homes."

While first home buyers are finding it harder to get into the market, partly because of tougher bank lending criteria, those already on the property ladder are not as affected.

This is because upgraders have large amounts of equity in their homes and have a track record paying off a mortgage.

As a result, Mr Rushton said they were viewed more favourably by lenders.

Some experts predict median house prices in most capital cities will double by the end of the decade due to population growth.

"Those making a move now on a prestige property could certainly realise significant gains if those sorts of predictions eventuate," Mr Rushton said.

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