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Non-bank lender Bridgit Home Loans head of distribution Stephen Doyle told Mortgage Business that they have noticed an emerging trend in home owners both requiring faster financing to take advantage of property opportunities and shorter loan terms due to home owners selling their existing homes but are still waiting to settle.
According to Mr Doyle, the non-bank lender has observed a 66 per cent surge in scenarios where borrowers are looking to buy a new home before or during the settlement on the sale of existing property.
During this same period, the duration of these bridging periods decreased by 70 per cent, from an average of eight weeks to five weeks, which reflected the demands from these clients.
Mr Doyle noted that their findings align with CoreLogic’s latest Housing Chart Pack, which reported the time taken to sell a property increased through the three months leading to July, as median days on the market reached 34.
Property listings were also 7.1 per cent lower compared to the same period last year, according to CoreLogic’s data.
“Lower listings are increasing demand and therefore competitiveness in the market, while the time it takes properties to sell is leading to more consumers requiring a bridging loan as they manage the sale and settlement of their home,” Mr Doyle told Mortgage Business.
Spring outlook
When asked on the outlook for the property market in the next few months, Mr Doyle said while there will be an influx of new properties coming to market in spring, as is typical for the season, there will “still be a gap in the five-year average, as market confidence is not the same”.
“The new listings will include home owners having to sell due to the ‘fixed rate cliff’, but it will also include sellers with strong equity positions who want to upsize or downsize quickly to capitalise on current housing prices before we see more accelerated growth,” Mr Doyle said.
Additionally, the non-bank lender expects property prices to maintain the slow pace of growth currently seen through to the end of 2023.
However, should there be more “conservative rate holds” and improvements to the economy, confidence will come back into the market, with competitiveness accelerating house price growth, according to Mr Doyle.
“We do not foresee a significant difference in the median days to sell in the short term, it could shorten slightly in spring but not drastically,” Mr Doyle concluded.
“Therefore, short term bridging will remain popular, as home owners use the bridging loan to buy as they wait for the sale or settlement to be complete on the sale of their existing home.”
[RELATED: Housing market showing resilience going into spring: CoreLogic]
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