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Great Southern Bank’s latest report reveals homeowners are happier than renters – with only 12% of renters having reported satisfaction with their current financial situation, compared to 35% of homeowners.
The same research shows that 4 in 10 aspirational buyers are wanting to purchase in the next three years.
As Australians continue to navigate the cost-of-living crisis, Great Southern Bank’s latest research signals that people’s overall financial worries could be starting to ease, with 47% expressing their concerns – compared to more than half (54%) last year.
32% also feel more confident about their ability to manage their housing costs in the current economic climate compared to last year (30%).
Mat Patterson, Head of Broker at Great Southern Bank says there is increased positivity compared to the banks ‘financial happiness’ sentiment in 2023, where more than half expressed financial concerns. This may signal that potential homeowners are adjusting to the current environment and continuing to navigate their way forward.
“This sentiment is good news for brokers, who play such an important role in unlocking the various pathways for potential homeowners.
“From rentvesting to helping buyers navigate government schemes, LMI or even leveraging the bank of mum and dad – brokers have been the experts who are helping over 70% of Great Southern Bank’s current home loan customers navigate the alternative paths to home ownership,” adds Mat.
“Brokers are also the key to helping many buyers start that journey much earlier than they previously thought, simply by building a relationship and having conversations early.”
Mat outlines some of the ways Great Southern Bank is assisting renters on their first purchase sooner:
1) Getting on the ladder quicker with Government Schemes
“We are consistently supporting customers through our participation in Government-backed lending schemes.
“Thanks to these schemes, many buyers are surprised that they’re able to start the process of buying a home sooner than they expected, with a smaller deposit and avoiding Lenders Mortgage Insurance – with applications eligible for 70-80% LVR tier pricing on variable loans.'
2) LMI Discounts
“First home buyers who are not scheme eligible can take advantage of our partnership with Helia which includes a 15% discount when LMI is paid upfront,” adds Mat.
3) 5% deposit with rent contributing to genuine savings
As most brokers would know, one of the key requirements from lenders is genuine savings, which can demonstrate to lenders that customers are financially responsible and can afford to make repayments on a home loan.
“We know not everyone has the luxury of being able to save up a significant amount of money for their deposit,” adds Mat,
“That’s why we support brokers and their customers by accepting a rental ledger as evidence towards genuine savings.”
Applicants submitting a rental ledger would need to demonstrate that they have consistently paid their rent on time for at least 6 months1 in addition to having a 5% deposit.
4) Renters buying regionally
From January to October this year, Great Southern Bank saw more than a third of First Home Buyers using government schemes to buy in a regional location.
Customers like Annaleise and her fiancé, Jake, purchased their home in Dalby with Great Southern Bank using a government scheme, which Annaleise credits for purchasing their home quicker.
“Owning a home means more stability for us. Renting came with a lot of unknowns with lease renewals and rent increases. We can now look ahead to planning our wedding,” Annaleise said.
Meanwhile further south, Independent Broker Adrian Feltham with Smart Mortgage Services Tasmania, says searching off the mainland in North West Mid Coast would capture a first home buyer a four bedroom home, potentially ocean views, for under $500k - and he’s seeing more first home buyers jumping at the chance.
“Buyers are seeing the under $500,000 price point a big differential, knowing that they can own for what they would be paying in rent.”
5) Rentvesting in a more affordable location
Broker Adrian Feltham adds rentvestors are also in the market for a regional bargain.
“I’ve got many investors looking at Tasmania, knowing they can’t afford an $800,000 or $900,000 purchase, so they are choosing to take advantage of affordable regional hotspots to own, while they rent where they want to live.”
Great Southern Bank has recently refreshed its policy for investors, including removing limits on the number of investment properties when buying with LMI.
Further, when an investor purchases their next residential property, Great Southern Bank accept 90% of income earned through their rental property as buyer income to service a second home.
Great Southern Bank’s Investment Home Loans hold $0 monthly and annual fees, allow unlimited extra repayments, free redraw2, and also have an interest-only option available.
The Great Southern Bank No Place Like Home report is an annual three-part series, with online surveys conducted in three waves across the year. The research is conducted by The Clever Stuff, in partnership with Pure Profile, with each survey containing responses from approximately 2,000 Australians aged 18-65 who are nationally representative of the Australian population by age, gender and location.
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