Spring Forward: Key Home Buying & Lending Trends

Home loan lender, ME outlines five key trends buyers and borrowers should be aware of this spring.

ME’s Head of Home Loans, Andrew Bartolo, said:

Trend #1: Cooling real estate market

“Spring is typically the time the market blooms with listings so we expect to see an uplift in lending activity.

“However, this year the market has changed from a sellers’ to a buyers’ market, dampening volumes and prices in some regions.

“Our customers will be waiting to see what the market does or will be driving a harder bargain. Sellers will, therefore, need to keep reserves realistic and prepare for their property to pass-in at auction.”

Trend #2: Declining investor interest

“With prices coming off their apex, the market cooling and APRA’s investor-focused lending restrictions taking effect, we expect many investors will be sitting tight and considering their options.”

Trend #3: Access to credit will remain tight

“Despite the 10% investor growth cap starting to come off some lenders, lending to investors and owner occupiers will continue to remain subdued. The 30% cap remains in place for interest-only loans, a product typically used by investors. Banks have also been tightening serviceability requirements, which has constrained overall volumes of lending by borrowers.”

Trend #4: Good opportunities for first home buyers

“The break-in rapid house price growth will allow first homebuyers previously priced out of the market to find affordable entry points, although strong activity will continue in affordable areas.

“First homebuyers will benefit from competitive interest rates, concessions (if eligible) and ample apartment stock, although checks should always be made to ensure quality buys.”

Trend #5: Refinancing on the rise

“We expect customers to shop around for better home loan deals, and, at the same time, benefit from strong competition by banks for owner-occupied customers.”