Demand for homes is at an all-time high. Applications for home loans in the first quarter of 2021 were up 23.5% compared to the same time last year.
Whilst applications for personal finance have seen a decline, applications for home loans, car loans, and buy now pay later are growing rapidly with no sign of slowing down. The surge has seen many home loan providers cease advertising of their products to help cope with demand.
The latest report from Equifax stated that the NT and WA primarily drove the demand.
WA was sitting at an increased loan application rate of 48.6% compared to the March quarter of 2020. The demand follows the current look of the WA property market, which has seen homes selling at record rates and prices. REIWA data showed that Perth houses are selling at their greatest rate in 15 years and 26 days quicker than they were a year ago. This has forced buyers to prepare and set themselves up to purchase, reduce debt, and ensure they have finance in place to put in a firm offer with limited terms and conditions.
The Domain House Price Report for the March 2021 quarter has also echoed the sentiment, revealing that nationally, house prices reached a new record high over the March quarter across the capital cities. Perth’s housing market is transitioning into another price cycle and is around one year into recovery following a five-year downturn.
But what does all this mean for you?
With interest rates at an all-time low, many homeowners are looking into their current arrangements and circumstances to save, upgrade or downsize their loan to take advantage of the record low rates. This will contribute to the increase in loan applications, market confidence and sentiment, which is also in a positive state.
The rental market is also holding firm in WA with increased demand across the state; according to REIWA, the leasing rate is down 18.8% compared to the same period last year, with the need for investors ever increasing.
Loan providers have seen the demand for investors to re-enter the market and have favourable terms in place. This will help balance the market in terms of demand and offer a good investment for those looking to start a development portfolio.
This surge in demand for home loans and increased competition for property has made a broker’s job ever more important.
Clients need solutions, timely turnarounds of applications and favourable terms. Brokers have access to multiple lenders, reduced wait times and experience in what terms and conditions will suit a client in the process.
If you are looking for help navigating the loan process, reach out to the team at Peard Finance to see how we can help you.