Singles are a growing force in the property market, with home loan applications from solo buyers increasing during the pandemic. Single Australians now account for 38 per cent of all loan applications received by ME, according to a bank analysis.
The latest data from the bank has revealed the number of home loan applications from singles increased 3 points in 2020 compared to 12 months prior.
An increase in single buyers comes despite house prices surging to record highs in 2020. The average loan size for single-mortgage applications increased by 1 per cent to $405,755, with home loan averages increasing by 0.8 per cent for single men and by 1.2 per cent for single women.
Despite a small increase in size of the average home loan for women in the past year, the loan size for single female applicants is well below men at $386,222 compared to $424,820 for single male applicants.
Single females make up 49 per cent of all single home loan applications, down 1 per cent from the previous year.
Single males are likely to leap into the property market before single females, buying in at an average age of 32 compared to 34, respectively. Comparatively in 2018 the average age for single first home loan applications for both women and men were 35, showing that many Australians are now entering the market earlier.
“Despite escalating house prices, the dream of home ownership is still a priority for many Australians – whether they’re applying for a loan by themselves or with someone else,” said ME’s head of home loans and personal banking Claudio Mazzarella.
“While there can be challenges with solo applications, such as saving for a deposit and borrowing capacity, it’s certainly not impossible.
“For those wanting to get their foot on the ladder, but unsure about a single mortgage application, one strategy to consider is co-buying – purchasing a property with a family member or friend. Co-buying enables both parties to save for a deposit in a shorter timeframe and increases your overall borrowing capacity.
“Also consider a guarantor − someone who uses their property as security for your loan. When you have a guarantor, lenders are more likely to let you borrow more money so if you default and can’t pay your loan, they can sell that property as well as yours to recoup their losses.
“Alternatively, one can buy as a ‘rentvestor’ − an investor who owns property but continues to live in rental property. The combination of rental income and potential tax breaks saves valuable additional cash, while allowing you to maintain your lifestyle by living in an area where you cannot purchase.”
Mazzarella’s tips for saving a deposit:
- Record and analyse your expenses to explore how much and where you could be saving.
- Prepare a budget and stick to it.
- Pay off your outstanding debt on credit cards or personal loans.
- Look around for saving accounts with high and consistent rates.
- Set up automatic deposits into a savings account.
- Look for ways to boost income and cut back on expenses such as living with family.