Westpac Sees Surge in Loan Applications Amid Government's Expanded First Home Buyers Scheme
Home loan applications at Westpac have skyrocketed following the government's expanded 5% deposit scheme, with mortgage inquiries more than doubling since October last year. The bank's chief financial officer, Nathan Goonan, stated that the first home buyers guarantee scheme has sparked significant interest, accelerating the mortgage market and leading to an influx of loan applications.
The bank reported a massive 150% jump in loan applications following the scheme's expansion on October 1st, with applications more than doubling in October compared to the same period last year. Despite the surge, Westpac declined to specify the number or value of applications but advised brokers that they would take two weeks to process.
The government's expanded scheme has reduced deposit requirements for loans, slashing the savings wait time for many first-time homeowners. This has led to a splash of new owner-occupiers entering the market, contrasting with investors who have dominated the market in recent times. Investors have used their existing housing portfolios to outbid prospective first home buyers at auctions, but the expanded scheme has changed the dynamics.
Westpac's lending to first home buyers had been declining before the expansion, amounting to just $12bn in the 12 months leading up to it. However, this has now surged as first-time homeowners take advantage of the government-backed guarantee. The bank's new lending to first home buyers had risen significantly, with investors accounting for most of the growth in lending over the same period.
Lower interest rates have also helped more mortgage holders get on top of their repayments, with Westpac reporting a delinquency rate of 0.73% for Australian home loans, down from 1.12% last year. However, hopes of further interest rate relief were recently dashed amid signs of rising inflation.
The Australian Prudential Regulation Authority is closely monitoring the impact of falling interest rates on lending practices, discussing limits on new investor, interest-only or small-deposit loans. Westpac's chief executive, Anthony Miller, stated that the bank plans to fight for more of the investor market while acknowledging the risks involved if it goes "too far, too fast".
In other news, Westpac has updated its sustainability report to show it has closed funding avenues available to thermal coalminers, reducing corporate lending to these customers and no longer providing bond facilitation. However, Kyle Robertson, head of research at activist group Market Forces, noted that the bank still lends significant sums to the oil and gas extraction sector.
Home loan applications at Westpac have skyrocketed following the government's expanded 5% deposit scheme, with mortgage inquiries more than doubling since October last year. The bank's chief financial officer, Nathan Goonan, stated that the first home buyers guarantee scheme has sparked significant interest, accelerating the mortgage market and leading to an influx of loan applications.
The bank reported a massive 150% jump in loan applications following the scheme's expansion on October 1st, with applications more than doubling in October compared to the same period last year. Despite the surge, Westpac declined to specify the number or value of applications but advised brokers that they would take two weeks to process.
The government's expanded scheme has reduced deposit requirements for loans, slashing the savings wait time for many first-time homeowners. This has led to a splash of new owner-occupiers entering the market, contrasting with investors who have dominated the market in recent times. Investors have used their existing housing portfolios to outbid prospective first home buyers at auctions, but the expanded scheme has changed the dynamics.
Westpac's lending to first home buyers had been declining before the expansion, amounting to just $12bn in the 12 months leading up to it. However, this has now surged as first-time homeowners take advantage of the government-backed guarantee. The bank's new lending to first home buyers had risen significantly, with investors accounting for most of the growth in lending over the same period.
Lower interest rates have also helped more mortgage holders get on top of their repayments, with Westpac reporting a delinquency rate of 0.73% for Australian home loans, down from 1.12% last year. However, hopes of further interest rate relief were recently dashed amid signs of rising inflation.
The Australian Prudential Regulation Authority is closely monitoring the impact of falling interest rates on lending practices, discussing limits on new investor, interest-only or small-deposit loans. Westpac's chief executive, Anthony Miller, stated that the bank plans to fight for more of the investor market while acknowledging the risks involved if it goes "too far, too fast".
In other news, Westpac has updated its sustainability report to show it has closed funding avenues available to thermal coalminers, reducing corporate lending to these customers and no longer providing bond facilitation. However, Kyle Robertson, head of research at activist group Market Forces, noted that the bank still lends significant sums to the oil and gas extraction sector.
. Now it's like anyone can just waltz in with a deposit of 5% and start owning a home. It's crazy! I'm not saying it's a bad thing, but it's definitely changed the game for first-time buyers.
. I'm not sure what the implications are, but it's definitely made things more accessible for people who want to buy a home.
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It makes total sense - who wouldn't want to buy a home with only 5% deposit? 
The fact that investors are no longer getting all the attention at auctions is super exciting for new homeowners! 
And I'm loving how Westpac is taking a more balanced approach to lending, with a focus on first-time buyers and mortgage holders getting back on track 
. However, let's keep an eye on those interest rates, shall we? 
. Now let's see how this plays out and if it's sustainable...
so yeah, I guess it's awesome that first-time homeowners can finally jump into the market now that they don't need to have like 100k saved up 
but at the same time, I'm kinda worried about all these new buyers competing with investors who are basically just taking out loans and buying up houses as a "investment" 
The government's expanded first home buyers scheme is definitely having a major impact on the housing market! It's great to see more people taking advantage of the 5% deposit scheme, but at the same time, it raises concerns about oversupply and potential price hikes 