Why 2021 may be the ‘Year of the Homebuyer’

The WhiteStar broking team explain why 2021 could be your year for property.

Only a month into the new year, and already our brokers are busy securing great home loan solutions for clients eager to get into a new home in 2021, and with conditions arguably more favourable than they’ve ever been, it’s easy to see why this year could be the ideal time to make that big move. The WhiteStar Finance broking team attributes this to the perfect combination of six prime factors driving market enthusiasm.

  1. Record low interest rates. Probably the biggest, and most talked-about reason for the surge in homebuying is the historically low interest rates we’re currently enjoying. In fact, the rates are so low, a number of our clients have discovered that paying off their mortgage each month is actually cheaper than renting, and that’s before they take into account all the personal and emotional benefits of owning their own home. It’s also a great time to review mortgages with fantastic loan options on offer for as little as 2.49*%.
  2. Banks are happy to lend. While banks have indeed tightened their conditions over the past few years, they are still very willing to lend to those applicants who meet their criteria – after all, home loans are the lenders’ ‘bread and butter’. And it’s important not to make assumptions about your own chances of getting a good deal (or even a loan at all). While it is impossible to guarantee that an application will be accepted, an experienced WhiteStar broker can guide you through the process of submitting a loan application that’s more likely to be attractive to a prospective lender, or help design a plan for borrowing in the future.
  3. Lending criteria is easing. There are plans with the current Federal Government that will potentially see an easing of criteria placed on banks and other lenders in assessing a loan application. But even outside of this, banks and financiers are enjoying more flexibility in who they lend to. This may mean being able to buy a home with a lower deposit, or offering more attractive rates to those who are self-employed or need a low-doc option but can still show a healthy and regular income, and an ability to comfortably manage a rate increase of 2.5%.
  4. The economy is bouncing back. Economic data from the Bureau of Statistics has, for the last few months, clearly indicated that the Australian economy is on the way back up. Job figures are improving post-recession, the International Monetary Fund is positive about the nation’s growth, and inflation rose by almost one per cent in December. All this points to a stronger economy in 2021, greater capacity for spending and a more positive lending market.
  5. Government supports remain. The Federal Government’s much-lauded HomeBuilder scheme, which offered grants of up to $25,000 towards new homes in 2020, is due to come to an end in March. There is, however, still significant government support available to eligible applicants, including the state-based First Home Buyers’ Grant, certain stamp duty subsidies and the Commonwealth-sponsored First Home Loan Deposit Scheme, which helps new owners with less than a 20% deposit avoid expensive mortgage lenders’ insurance.
  6. The bank of mum and dad is still popular. Because of their place on the career timeline, many within the Gen-X and ‘Baby-Boomer’ generations were spared the worst ravages of Australia’s ‘COVID recession’ and managed to maintain their jobs, incomes and share portfolios. This meant that, despite the economic roller-coaster of last year, parents of new home buyers are still in a strong financial position, and able to support their children’s property ambitions.

With these six fundamental drivers of the housing market still in full swing, the environment in 2021 looks promising, which means now is the ideal time to chat to a specialist WhiteStar mortgage broker. Not only do we have over 20 years’ experience in finding outstanding deals, but we also have access to more than 20 quality lenders, and their suites of mortgage products, whether your credit history is excellent, or has room for improvement. It’s just part of the reason we regularly receive five-star reviews from our happy clients.

*Lending criteria apply. The advertised interest rate dated on 4/02/2021