However, tight servicing tests continue to hinder the home loan market
The property market continues to recover from the impacts of the COVID-19 crisis, and borrowers are in for a treat with increased competition in the home loan market and possible cuts in one and two-year rates in spring.
The latest property valuer market survey by independent economist Tony Alexander found that the number of inquiries for house valuations has risen by 50% in July.
“Enquiries for valuations to support the refinancing with a new lender of a currently mortgaged residential property have increased. But they have decreased for commercial property,” Alexander said, as reported by Landlords.
“This makes sense in that there is no evidence to date of any large decreases in residential property values, listings remain in short supply, and there is plentiful evidence of many buyers in the marketplace.”
Read more: Kiwibank boasts increase in home lending inquiries
However, tough servicing tests continue to drag the home loan market down despite record-low interest rates – preventing borrowers from tapping into attractive headline interest rates.
Alexander's previous survey revealed that advisers are concerned about strict lending criteria and tight servicing tests, with 60% saying that lenders have “tightened up and are still assessing debt service ability at rates more than twice they are advertising.”
“Banks are requiring substantial proof of post-lockdown incomes. They are also actively discriminating against borrowers working in certain industries most heavily affected by the virus and border closure,” Alexander told Landlords.
