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A dramatic fall in interest rates coupled with the increased first home owner grant has seen relatively healthy business levels for brokers in recent months. But ever-tightening lending policies along with numbered days for the beefed-up grant are a growing concern for the industry.
Alison Whittle, director of operations at Tiffen and Co. and The Mortgage Detective in Canberra, told Mortgage Business her team had been flat out over the past few months.
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“Submissions are up considerably,” she said.
A recent Mortgage Business straw poll showed Ms Whittle’s business is not alone. More than half (52.6 per cent) of the 437 respondents said business in 2009 to date had exceeded their expectations.
Ms Whittle said first home buyers were a major factor behind the surge in business.
“First home buyers have been very active and there is some degree of panic out there because of the uncertainty of just when the increased grant will end,” she said.
Indeed, first home buyer business has exceeded most of the industry’s expectations – including the banks whose servicing levels have suffered as a result.
The latest ABS statistics show the percentage of borrowers who are first home buyers hit a record 26.9 per cent in February and contributed to an increase in housing finance activity of just under 12 per cent in the past six months.
But according to the principal of LJ Hooker Financial Services Northern Rivers, Bob Campbell, the banks’ tighter lending policies have made the beefed-up grant all but redundant.
“We are now finding, with the banks’ changing lending policies, that a lot of first home buyers are missing out. They simply don’t have the genuine savings lenders are now requiring,” he said.
“It’s making it very difficult for us.”
Ms Whittle agreed. “I don’t think anyone expected such rationalisation by the lenders,” she said.
