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A non-major bank believes single borrowers are being “squeezed out of buying a home”, after it saw single loan applications drop by nine per cent over two years.
According to super fund-owned bank ME, the number of home loan applications from individuals has fallen by nine points to 35 per cent (based on customer data for 40,000 home loans over the past two years).
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It added that the average loan size for single mortgagors increased by nine per cent, to $355,000, over the same period.
The bank said that the average loan amount for singles was largest in NSW and Victoria, which have been experiencing rapid rises in house prices over the last few years.
According to the lender, loan sizes rose by 16 per cent (to $422,000) in NSW and 11 per cent (to $348,000) in Victoria. In contrast, the average loan size for Queensland-based single mortgage applications increased by just 2 per cent to $336,000.
Of all borrowers going to the lender, women appeared to be pulling back most from the market, with ME reporting that the number of single female loan applications fell by 14 points, whereas the number of single male applications fell by 5 per cent.
ME’s head of home loans, Patrick Nolan, commented: “Even as part of a couple, east coast property prices are out of reach for many Australians. But being single is not a reason to delay or forgo home ownership. Buying your own home is one of the smartest decisions you can make.”
He suggested that single buyers could benefit by investing their money, “tapping into the bank of mum and dad”, or “joining forces with someone who isn’t [their] romantic partner”. Mr Nolan also recommended that single borrowers arrange for pre-approval of a home loan to give them “a good idea of what [they] can afford and not waste time looking at homes that are beyond [their] budget.”
The findings come in the wake of analysis by personal financial management software company Moneysoft, which found “disturbing signs of mortgage stress” among Australian home owners.
[Related: Median Sydney house prices now over $1.05m]
