16 November 2020|2 minute read
There are promising signs for the property market as the new year approaches, with Australians seemingly shaking off the economic uncertainty posed by the global pandemic.
The home loan market has never been stronger, according to leading home loan broker Aussie, as they report the highest level of home loan applications and settlements on record for an October month – over $1.6 billion in settled home loans.
The brokerage is now forecasting towards a settlement value of $18 billion for the FY21 financial year.
The growth projection follows record lodgements in the first quarter to September 30, 2020, worth over $6 billion, and 32,000 loans settled for the calendar year to date.
Home loan applications and pre-approvals numbers are surging as Australia emerges from the COVID crisis and buyers are seeking both owner-occupied or investment properties.
While the property market has been unsettled for most of the year, CEO of Aussie, Mr James Symond reported the traditionally strong Spring season had become even busier following the latest drop in the cash rate by the Reserve Bank of Australia.
"Competitive interest rates and the RBA's record-low cash rate to a 0.1 per cent may have been triggers for the increasing rate of home loan applications. We’ve never experienced pent up demand like this,'' he said.
“We are seeing confidence of consumers return. I believe the comeback for the Australian property market has certainly begun. From a demand perspective – there is quite a shift in sentiment.
“The lowest interest rates on record, and ongoing local government funding schemes, are attracting buyers who have been able to save money as their travel and social spending were restrained during COVID.”
In addition, “Personal income tax cuts, a falling number of coronavirus cases and the easing of restrictions have also helped to lift confidence in recent weeks.”
Therefore, according to Mr Symond, “The current conditions are creating the perfect storm of positive growth drivers which will propel our property markets into 2021 and 2022.”
Record low mortgage rates coupled with slightly weaker property market conditions have also contributed to a growing trend of home loan borrowers paying less in their mortgage repayments than they would in rent in the same suburb, according to Aussie’s Buy vs Rent 2020 Report released in early November.
“For first home buyers wanting to get a foot on the property ladder, or established home buyers wanting to upgrade, or investors looking to hold onto a property, housing affordability has never been cheaper than it is today,” according to Mr Symond.
“Buyers are rushing to take advantage of these conditions, and homeowners are seeing some of the most attractive rates lenders have ever offered; so many of our brokers are working around the clock to help customers with their applications. This is another encouraging sign, showing that Australians appetite for property is stronger than ever.”
Mr Symond concluded, “While there are still many challenges ahead for our economy and our property markets, there are many reasons to be optimistic about certain the Australian property market, particularly in the long term.”
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.