- Grant drives home loans blowout
- CBA on hiring spree
- Lenders calling for extension of grant
THE nation's largest lender has been forced to hire more staff, as demand for the Federal Government's first home buyer grant has seen processing times for loans blow out.
The
Commonwealth
Bank has been inundated with
people seeking home loans - hitting a 40 per cent increase in
applications last month.
Mortgage lenders and other major banks are now calling for an extension
on the first homebuyer grant, which is due to expire on June 30.
The Government increased the first home buyer grant from $7000 to
$14,000, with those buying newly constructed homes getting an
additional $7000 to make $21,000 in October.
The high
demand for loans has caused a major backlog in assessing the
application, with the
Commonwealth taking up to 20 days to process loan documents.
The bank's head of retail products Michael
Cant said its first homebuyer
volumes had more than doubled since the grant was introduced in October
and aggregate mortgage volume was up 40 per cent since the middle of
February.
He defended the bank against suggestions it was now unable to cope with the flood of applications.
"On the whole I think we have been coping well for the volumes that are coming in," he said.
"We've had to put on more staff and we've been looking to increase staffing levels through temps and contractors."
Mr Cant said the June 30 deadline was contributing to "the rush" by customers to get loans in place.
"It would be in the interests of the industry that the grant be phased out in an orderly manner," he said.
Mortgage Choice chief executive Paul Lahiff said more than $8 billion worth of home lending had been completed by the end of January, and he believes more than $2 billion was to fund purchases of new houses.
"I suspect the multiplier effects in the economy for suppliers of building materials will start to show up in official economic data for the March and June quarters," Mr Lahiff said.
Home loan brokers are among the first intermediaries to discern imminent changes in home construction activity because they are a first "port of call" for people planning to build.
Mr Lahiff said his company experienced continued record growth throughout February with more than 25 per cent of all brokered loans being for new dwellings."
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