But will turnaround times stand in the way of home buyers' dreams?
Australia is in the midst of a broad-based boom after property values rose at their fastest rate in 17 years throughout February, said CoreLogic research director Tim Lawless.
Home values grew 2.1% in the second month of the year as tighter housing stock, record low interest rates and government stimulus created the largest month-on-month change in CoreLogic’s national home value index since August 2003.
According to Lawless, the last time CoreLogic recorded a synchronised growth phase across all capital cities and rest of state regions was in mid-2009 to 2010 following the housing stimulus of the GFC.
Read more: Surge in buyer activity set to continue
While Sydney and Melbourne caught up from weaker growth posted in 2020, recording a 2.5% and 2.1% increase in values respectively, quarterly trends showed in favour of Darwin at 5.5% growth, Hobart at 4.8% and Perth at 4.2%.
Lawless said housing affordability will likely become a challenge for homebuyers in the two largest capitals as stimulus winds down.
“Whether this newfound growth in Sydney and Melbourne can be sustained is unclear,” said Lawless. “Both cities are still recording values below their earlier peaks, however at this current rate of appreciation it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs.”
While supply has remained low; the number of advertised properties for sale across the country is more than 26% less than the same time last year, though an increase in pre-listing activity over the past month shows promising signs of greater stock levels to come.
But despite this, the likelihood that demand will continue to increase means buyers will need to act fast to secure a property in the coming months, said Lawless.
“Serious buyers would be well advised to have their financing pre-approved and be ready to act fast in order to secure a property under such tight supply conditions,” he said.
While this appears great news for mortgage brokers, lender turnaround times could pose quite a challenge for clients as properties get snapped up in a matter of days, said managing director of 1st Street Financial Jeremy Fisher.
While things are generally improving and many lenders are able to give a faster time to ‘yes’, others are still experiencing processing delays caused by COVID-19, he explained, making it crucial for brokers to select lenders with rapid SLAs as part of their best interest duty obligations.
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“Sometimes the most important aspect for a client is getting a loan approved,” he told MPA. “Obviously rates and lender features are important, but getting a loan approved is becoming a client’s first priority. If we can’t get our clients’ loans approved in a matter of days, then they are going to miss out.
“I think a broker’s job is possibly harder and even more important now because of the speed to market.”
In some cases, properties aren’t even entering the market and are trading hands through buyers’ agents, he added, making it imperative that clients are both well-versed and in a position to act confidently.
“We certainly can’t be sitting around twiddling our thumbs in this market, that’s for sure,” he said.
