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A new forecast from Master Builders Australia estimates that over the last year, and into 2022, more than 245,000 new homes will be built – as pent-up demand fueled by the government’s HomeBuilder scheme powers a new-build frenzy.
In fact, MBA figures show that, by July, HomeBuilder will have had 130,000 applications, which would mean nearly $40 billion of construction work from the scheme – helping to boost the Australian GDP by 5.8%.
Speaking to The Australian, MBA chief executive Denita Wawn said that even though housing is booming, government dollars spent on property give an enormous bang for their buck.
“Governments threw everything they had at the economy to protect it from COVID but despite it amounting to the largest government stimulus in our history it still only equalled one in every $5 spent in the economy.
“We need policies to generate a surge in economic activity to provide the confidence that will unleash household and business spending. Every dollar spent on building gives back $3 in benefits to the wider economy, which means the government must continue to put our industry at the vanguard of economic recovery.”
And even as CoreLogic figures show that the total value of residential real estate has reached $8.1 trillion, some sectors, it would seem, are not experiencing a building boom. The MBA is forecasting a drop of nearly 11% in commercial construction.
Commercial real estate is worth a fraction of residential, at just under $900 billion, and a huge slump in demand for new offices, hotels and aged care facilities has applied the brakes to any commercial expansion momentum. Last year’s transaction value was half the previous year’s figures.
A silver lining to the commercial contraction, at least for non-banks, is that major lenders are retreating from the commercial space. A report from JLL earlier this year forecasted that non-bank lending could increase to over 30% of this lucrative market, which would equate to over $110 billion in loans.
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