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Following three successive rate hikes and a Federal Budget that overhauled investor tax settings, Evolve Lending and Finance has recorded a decline in new business, but a big increase in activity from existing customers who had purchased their first home within the past four years.
“A change we are seeing at the moment is the opportunity that is being taken by those looking to upsize,” said the brokerage’s managing director, Mark Stevenson.
“We are already seeing some homeowners taking advantage of a narrow window to make a bigger leap forward than they would have otherwise been able to achieve.
“More than 50 per cent of the inquiries we have been getting are from people who we helped into their first property within the last three to four years, and they are now looking to upsize into bigger homes for their growing families to take advantage of lower prices in some sections of the market.”
The trend is also being reflected in broader broker activity, with Australian Finance Group (AFG) data showing upgraders accounted for 44 per cent of residential mortgage lodgements in the June quarter, up from 43 per cent in the previous quarter.
AFG said this latest result was a level reached only twice before over the past decade, in 2018 and 2022, with homeowners looking to trade up becoming an increasingly dominant force in the broker market.
Other brokers have also told Broker Daily that the market had in many ways become more favourable for buyers, with more room for price negotiation and private treaty sales.
Stevenson said many of the borrowers Evolve Lending and Finance had been dealing with had also experienced income increases of up to 15 per cent, supporting their serviceability.
“They still have decent equity in their current homes, generally a townhouse or a unit, which are in the sub $1 million price point,” he said.
“These homeowners seem to have been less impacted by the recent changes in property values than the type of homes in which they are looking to upgrade.”
Stevenson said that for those with the servicing capacity, buyers have the opportunity to negotiate six-figure savings compared to recent pricing.
“This could be a suburban 4–5-bedroom home on a moderately sized block, which have been available from $1.3 million to $1.5 million,” he said.
“In some cases, these properties are listing for $100,000 to $150,000 less than they would have six months ago, meaning they are able to have a lower gap between their current home value and their next home value.”
[Related: Government should ‘swallow pride’ on budget, says FBAA]
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