Homebuyer confidence defying COVID impacts

Bankwest data has highlighted the impact of government grants and low interest rates on the WA housing market, with new loan applications, first homebuyer numbers, and fixed rate home loans soaring in defiance of COVID-19.

Bankwest homebuyer trends in WA showed applications in the first six months of 2021 up 62 per cent year-on-year, the ratio of fixed loans more than tripling, and first home buyers at one stage accounting for a third of applications.

About 10 per cent of customers were opting to fix their home loan rate in January 2020, but low interest rates had that number steadily climb to about 30 per cent at the start of 2021, increasing to 35 per cent at the start of July.

The data also highlighted the significant impact of the Federal Government’s HomeBuilder and WA Government grants, such as the Building Bonus, in June 2020 driving first home buyer activity in the market.

First home buyers usually account for 10-15 per cent of applications, but that number began rising as grants were announced, peaking at more than 30 per cent in November, before tapering, with levels having since normalised.

The data also showed consistency in investor-v-owner occupier applications, which remained stable year-on-year.

Bankwest General Manager Homebuying Peter Bouhlas said: “The past 12 months have provided challenges and opportunities for many sectors of the economy, and the housing sector has certainly reflected that.

“A recent Bankwest survey on the next generation of homebuyers found they continue to hold the dream of owning their own home, and we saw that following last year’s government grants, with first home buyer numbers surging.

“We’ve also seen total applications performing strongly in the first half of 2021 compared to the previous year, with customers taking advantage of low interest rates to either enter the market, or lock in a fixed rate.

“Existing homeowners have also benefited, with increasing property prices improving equity positions, which stimulates refinancing activity through access to lower LVR pricing, and supports confidence in additional lending.

“However, we also know the state of the housing market has presented challenges, particularly through the rental pressures people are facing, and there are members of our community struggling to keep a roof over their heads.

“We’re cautiously optimistic that the housing industry will continue to remain strong, providing invaluable activity in Australia’s economic growth, but we must also ensure the vulnerable members of our society are supported.”