1/3 of buyers feel they ‘miss out’ due to slow financing

The survey of nearly 800 Australian mortgagors who purchased in the last 12 months revealed that the problem was particularly apparent for home buyers in NSW and South Australia, where 41 per cent of borrowers in each state said they had missed out on property opportunities while waiting for finance approval. 

Following NSW and South Australia was Western Australia, where a third (33 per cent) of borrowers said they had missed out, with Victoria and Queensland slightly behind at 31 and 30 per cent, respectively. 

Younger home owners were found to have been the most impacted, accounting for 45 per cent of those aged under 35, compared with 39 per cent of 45–54-year-olds, 34 per cent of 35–44-year-olds, and 28 per cent of 55–64-year-olds. Just 14 per cent of those aged 65-plus said they had missed out. 

When asked whether respondents thought banks had slow processes when it came to arranging and approving mortgages, 59 per cent agreed. 

Speaking of the survey findings, Bridgit chief executive and co-founder, Aaron Bassin, commented: “Customers shouldn’t have to wait weeks or months to receive a decision due to slow manual processes. It’s putting Australians at a disadvantage and they are missing out on dream properties. 

“As we approach the end of the year, homeowners tend to rush to sell and seek finance approval but it gets more challenging due to staff taking holidays, slow processes and banks having long shutdown periods.” 

He flagged that Bridgit — a bridging loan specialist founded by former MoneyMe head of strategy Aaron Bassin and Nick Jacobs — had seen a flurry of activity recently as delays had resulted in borrowers turning to alternative lenders and other finance solutions for help. 

“We see the December period as one of our busiest periods as borrowers continue to look outside traditional lending for digital solutions,” he said, suggesting that the fintech’s 24-hour approval was particularly attractive to home buyers at this time. 

Fewer brokers turning to major banks 

While turnaround times have been stablilising this year after blowing out in 2020/21 particularly for broker channel clients, the major banks still tend to have longer turnarounds than their non-major bank and non-bank counterparts. 

Indeed, data from Momentum Intelligence’s monthly Broker Pulse survey showed that turnaround times are not commonly a leading consideration for brokers when choosing a major bank, with only a quarter of brokers stating that turnarounds are a predominant factor for recommending a major bank to a client. Instead, brokers tend to prioritise major banks for clients due to their ability to meet client circumstances (as cited by 60 per cent of broker respondents), the Broker Pulse survey showed.

Fewer brokers also reported using major banks in October compared to the previous month, with a 12 percentage point drop in those using major banks in October 2022.

The survey of 234 brokers — conducted between 1–15 November — revealed that 70 per cent of brokers recommended a major bank to their clients in October, down from 82 per cent in September 2022.

[Related: Broker usage of big 4, non-banks falls: Broker Pulse]