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“It is a positive that CBA and Bankwest are supportive of this very important part of the housing sector and they should be congratulated for that. It is however always a concern when one organisation holds such a large share of a particular sector and it would be great to see other lenders have a closer look at their policies and processes for first home owners.”
1st Street mortgage broker, Jeremy Fisher, agrees, saying he's not concerned by what he considers to be a temporary situation.
“This result speaks for market sentiment which at this point in time, CBA is obviously delivering what the first home buyers are looking for. No doubt this will change seasonally but for now, they are on the right track.”
Hewitt says thinks the major bank’s FHOG policy, FHO family guarantee loans, 95% LVR + LMI policy and their ‘competitive; LMI premiums are the likely causes for CBA’s success with first home buyers.
“Raising a deposit is the most difficult part of getting into your first home, even for people on good incomes. Flexibility in this area is the key for first home owners…The first home owner segment is such an important area for the housing market and the economy in general and more innovation is required from government and lenders to support it.”
But Fisher says that, as the major banks are offering some of the ‘most competitive loan offers ever seen’, it's a hard space for the non-majors.
“However, providing they offer competitive pricing (consistently) and have a long-term plan to work with brokers to make the process easier (given brokers are getting close to writing 50% of all home loans in Australia), this will help narrow the gap between the majors and themselves.”
Fisher adds that there remains a definite place for non-majors in the market.
“So it is important that brokers look outside the major banks when researching the most suitable lender for their customers as the non-majors are willing to compete for the business.”
