According to a recent survey conducted by comparison site Finder among its panel of commentators and economists, the smaller players in the home lending market will continue to gain momentum as borrowers increasingly turn away from the big four banks following the fallout from the royal commission.
Finder insights manager Graham Cooke said that the survey results showed that a third of the experts predicted that the royal commission would result in a decline in home loans with the big four banks.
“A third of our experts think that consumers will move away from the big four due to trust issues and stricter lending conditions,” Mr Cooke said.
“As a result, what we can expect to see is more borrowers turning to smaller and online lenders, which typically offer lower rates to lure in new customers. They often also tend to have easy-to-use platforms which can mean faster application and approval, lower fees and more personalised customer service than larger lenders.”
Housing affordability improving
With house prices tumbling and rates at all-time lows, Mr Cooke said that the outlook for housing affordability is now looking much stronger.
While the Reserve Bank of Australia chose to keep the cash rate on hold at 1.5 per cent this month, 75 per cent of experts predict the next rate move will be down, he said.
“With the housing market continuing to tumble, and other global and international economic factors looking grim, experts seem to be sure we’re looking at least one cut in 2019, if not two,” Mr Cooke said.
Nine out of the 17 experts predicted that the cash rate will drop to 1.00 per cent before the year is over.
Shift in sentiment
In addition to housing affordability, there has also been a significant shift in four other key areas of the economy, according to Finder.
Mr Cooke said that while positive economic sentiment in housing affordability reached its highest level recorded, positive sentiment for employment and wage growth dropped to its lowest level.
The economic sentiment and rate cut predictions signal good news for would-be mortgage holders, Mr Cooke said, but a different story for savers.