Spring housing season to be most digital ever: CBA

The Commonwealth Bank of Australia (CBA) has predicted that the upcoming spring property buying season could be the most digital on record.

According to CBA data, customers have been seeking out information and engaging with their home loan and interacting with their lender or broker via digital channels more than ever before.

Around 90 per cent of CBA’s property transactions are now settled online, while the usage of DigiDocs – which is a new process that replaces paper contracts – has surged by 2,000 per cent since July 2020.

Around 340,000 CBA customers have been checking their home loan balance or interacting with the content and tools in the “manage my loan” functionality on NetBank an average of 26 times a month, representing a 13 per cent increase year-on-year.

Around 5,000 CBA customers have been using its digital splitting tool to split, switch, and fix their home loan since the tool launched in April 2021.

Commenting on the increased customer usage of digital tools, CBA executive general manager of home buying, Dr Michael Baumann said: “Restrictions around movement and face-to-face meetings as well as COVID-19 induced policy changes around government processes has meant the home buying process has become increasingly digital.”

CBA said it has launched a new home buying hub in the CommBank app to address the digital shift in customer behaviour, which provides lender details and pre-approved letters, and prompts customers when their conditional approval is about to expire.

It also offers checklists to assist customers with their purchasing process, including calculating upfront purchasing costs, when to engage a solicitor or conveyancer, and arranging a property inspection.

Investors to spring back

In addition, the major bank has forecast a return of investors this spring buying season, with the percentage of mortgage approvals for investors climbing from 23.0 per cent in October 2020 to 29.4 per cent in July 2021.

Meanwhile, investor system growth increased by 2.9 per cent over the last 12 months, after declining by 0.6 per cent in July 2020, and rising by 2.3 per cent in July 2021.

“The current low-rate environment is attractive to investors seeking a higher yield on their investments,” Mr Baumann said.

“The huge injection of government stimulus into the economy over the past 12-18 months will also see some investors who fear inflation invest in property which will further increase the investor mix of new approvals.”

While first home buyers (FHB) peaked at 18.0 per cent in December 2020, the proportion had dropped to 12.0 per cent by year’s end.

Mr Baumann noted that FHBs face affordability challenges, with house prices rising 18.0 per cent in the last 12 months, and with economists predicting price growth of over 20.0 per cent this year.

He said: “As we enter the spring buying season, there are affordability challenges for first homebuyers, however, availability of spots via government homebuyer schemes will alleviate some of this stress.

“Commonwealth Bank is one of only two major lenders to offer loans under the Government’s First Home Loan Deposit Scheme (FHLDS), New Home Guarantee (NHG) and Family Home Guarantee schemes.

“Since new spots were released on 1 July 2021, we have seen strong demand from customers, particularly customers applying for the First Home Loan Deposit Scheme.”

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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.