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FHBs drive slump in home loan aspirations

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Reporter 4 minute read

Fewer Australians plan to take out a home loan in the next 12 months, down by 17.7 per cent year-on-year, according to the latest research from Roy Morgan.

The latest findings from Roy Morgan’s Single Source Survey, which is based on in-depth personal interviews conducted face-to-face with over 50,000 Australians per annum, has revealed that in the three months to October 2018, the number of Australians that intend to take out a home loan in the next 12 months has declined, dropping by 17.7 per cent from the previous year.

According to Roy Morgan, the number of Australians intending to take out a home loan “deteriorated significantly”, from 7.3 per cent of the Australian population in the January quarter to 6.3 per cent of the population in the April quarter, with home intentions falling further in the July and October quarters to 5.9 per cent.

Roy Morgan attributed the decline in home loan intention levels to a drop in first home buyer (FHB) intentions, which has fallen by 44.5 per cent.


Conversely, the research found that existing borrowers looking to refinance represented the largest portion of Australians that plan to take out a home loan in the next 12 months (45.4 per cent).

Further, according to the survey, the biggest gain over the last 12 months was from former mortgage holders looking to obtain a new home loan, which increased by 34.6 per cent.

Reflecting on the results, Norman Morris, industry communications director at Roy Morgan, said that the drop in home loan intentions would have a significant impact on lenders.

“The decline in home loan intenders over the last year is likely to have a major impact on banks in the coming year, particularly as the drop has come from first home buyers who are major generators of increasing volumes,” Mr Morris said.

“The reduction in first home buyers is likely to come from a number of potential reasons, including uncertainty as a result of declining housing values, likely interest rate movements, mortgage stress and job risks.”

Mr Morris added that misconduct raised in the financial services royal commission and the recent tightening of lending standards have contributed to the overall decline.


“The current high level of negative publicity given to borrowing by the [financial services royal commission] is also likely to be impacting on both the supply and demand for home loans,” Mr Morris said.

“The potential for the tightening of lending criteria and issues relating to mortgage brokers are just some of the likely issues to have a negative impact on this market.”

[Related: FHBs an outlier amid lending slump]

FHBs drive slump in home loan aspirations
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