Mortgage brokers inundated with home loan applications as homebuyers prepare to purchase

The housing market looks set for a busy start to the year after many Australians spent the Christmas break getting ready to buy a home.

Mortgage brokers report they have been inundated with inquiries and home loan applications during what would traditionally be a holiday break. 

Most interest has come from owner-occupiers including first-home buyers, while some investors are also keen, according to mortgage brokers. 

It comes as Sydney and Melbourne house prices are tipped to continue to grow in the first half of 2020 following a strong rebound late last year due to the combination of several interest rate cuts, relaxed lending conditions and renewed market confidence after the federal election.

Melbourne-based Foster Ramsay Finance principal mortgage broker Chris Foster-Ramsay said he was “flat out” processing applications since November.

“I’ve postponed my usual two-week break over Christmas and New Year’s,” he said, adding that his appointments are up 200 per cent year-on-year to date.

Most applications have come from first-home buyers and upgraders with many interested in Melbourne properties in the $600,000 to $700,000 range.

“There are decent properties close to transport, schools … what that means is as soon as property is coming on in those fringe suburbs anywhere between the $300,000 to $400,000 range, the competition is excessive.”

Melbourne-based 40Forty Finance director and mortgage broker Will Unkles said business was booming.

“In terms of inquiries and the keenness of buyers to be ready, it’s significantly stronger than six months ago,” Mr Unkles said, adding loosening lending policies have helped more applicants qualify for home loans in recent weeks.

“I wouldn’t say it’s easier than ever before, but it’s far easier than 12 months ago,” Mr Unkles said.

“We were meant to be off this week but I’ve already had seven appointments … perhaps [buyers] have set new year’s resolutions to buy. There’s a lot of activity in the first-home buyer and next buyer [upgrader] market.”

Mr Unkles said banks were not poring over spending habits like they were six months ago.

“Deals are going through far easier, there are less questions from banks,” he said. “No bank will admit that but I’m finding from experience that lenders are being less critical.”

Asked whether the financial services royal commission continued to have an effect, he said: “It had a short-term effect. They all pulled their socks up and were on their best behaviour. They’re out of the noose [now].”

But Sydney-based The Lending Alliance mortgage broker Keegan Rezek said while the overall volume of home loan applications had picked up, so had the workload for approving it.

“There is a lot of activity … a lot of the banks are vying for business and pricing across the board, that’s the main driver,” Mr Rezek said, adding that the First Home Loan Deposit Scheme was fuelling interest, too.

“The workload is a lot more. The banks keep moving the yardstick on the requirements of applications.”

Mortgage IQ principal and mortgage broker David Chia also said tougher compliance measures meant buyers had to factor in a longer lead time for home loan approval.

“We have to go through a lot more due diligence … that means analysing bank statements. The bank requires it because of ASIC and APRA. It now takes two to three times longer,” Mr Chia said.