Hopeful home buyers will need to prioritise saving funds this year if they want to buy a property amid more stringent lending requirements, a top broker said.
Louisa Sanghera, Zippy Financial director and principal broker, also noted that first-home buyer activity remained elevated compared to the past decade.
“Stimulus measures such as the HomeBuilder Scheme did bring forward the buying decisions of many first-time buyers, but they still remain highly active in the market, even after last year’s strong property price growth,” Sanghera said.
Australian Bureau of Statistic Lending Indicators for December 2021 showed that compared to the period prior to the pandemic, new loan commitments to owner-occupier first-home buyers are at their highest level since October 2009.
Sanghera said last year’s minor adjustments to mortgage serviceability calculations had not resulted in a significant change in loan approvals, but it is still important for prospective property owners to show genuine savings.
“Lenders always want to see a genuine savings history, including funds that represent at least 5% of the property’s purchase price,” Sanghera said. “Banks generally recognise that it is difficult to save the deposit for your first property, because of the added expenses of paying rent. However, it is never a bad thing for any potential borrower to show that they have been diligently saving funds over a period of time, even if those funds represent only 5% of the purchase price.”
So, what do prospective property owners do to save property deposit? Sanghera gave five techniques:
Sanghera won the 2021 Australian Mortgage Awards Independent Broker of the Year, the 2021 MFAA NSW Residential Broker of the Year, and the 2021 Women in Finance Awards Mortgage and Finance Broker of the Year.
