15 September 2020|3 minute read
Australia’s leading mortgage broker, Aussie, has reported a record 71 per cent jump in home loan pre-approvals across January to August amid the 2020 pandemic. August was officially the highest volume of pre-approvals on record since 2014, and that figure has more than doubled since 2018.
First home buyers accounted for more than half (53%) of the pre-approval volumes across January to August. Pre-approvals from first home buyers also increased over 130 per cent across January to August compared to the corresponding period last year.
Unsurprisingly, New South Wales led the way in pre-approval volume this year, followed by Victoria, Queensland, and South Australia. However, despite the increasing volumes, Victoria has recently seen a sharp decline following the state’s challenging economic conditions.
CEO of Aussie, Mr James Symond said, “Overall, the figures show that borrowers are becoming smarter and better prepared before purchasing a property – which often is life’s biggest investment.
“There’s a strong indication that people are giving themselves as much certainty as they can in an uncertain environment – and property seems to be where Australians seek that certainty to ‘bank on’ their future,” he added.
While the property market has been unsettled in the wake of COVID-19, Mr Symond pointed out that spring is typically the busiest time of year for the real estate market; adding, “There’s a good chance that this year won’t be any different given the record number of pre-approvals ahead of the spring property season.”
As the property market remained restrained but steady across the previous quarter and as lower supply kept values stable, Mr Symond also suggested that, “These market conditions could be enticing first home buyers in particular, to secure a good deal.”
With interest rates at an all-time low and remaining low, there are people out there seeking the right opportunity he said: “More Australians are coming to terms with the new normal as it impacts their day to day. For some people, the savings from lack of travel and social spending means a portion of the market are now ready to act on their property dreams.”
“In addition to the market conditions, the increased government support over the past 6 to 12 months, is encouraging people to progress their property goals, many of whom are first home buyers,” he added.
“First home buyers are recognising the opportunity in the current market conditions, while many are taking advantage of government initiatives such as the Federal Government's First Home Loan Deposit Scheme, which requires only a 5 per cent deposit.”
“All eyes will be watching on to see what the spring property season will bring this year. Based on these record pre-approval volumes, many Aussies have got their finances sorted and are ready to buy when the right opportunity comes along,” he concluded.
Aussie was founded in 1992 by John Symond and was widely credited for bringing competition to the Australian home lending industry. For nearly 30 years, Aussie Brokers have put progress within reach of more Australians, helping over 1.5 million customers with their home loan. Today, Aussie has the largest retail footprint of any mortgage broker brand in Australia.