As demand for the Federal Government's first home buyer grant has seen processing times for home loans blow out, the nation's largest lender has been forced to employ extra staff.
Mortgage lenders and other major banks are now requesting an expansion on the first home buyer grant, which is due to expire on June 30. Due to the high demand for loans there is a major backlog in assessing the application, with the Commonwealth taking up to 20 days to process loan documents.
Michael Cant head of retail products at the Commonwealth Bank said first homebuyer volumes had more than doubled since the grant was started in October and aggregate mortgage volume was up by 40 per cent since the middle of February.
Mr. Cont defended the bank against suggestions that it was unable to cope with the flood of applications. He further stated that he thought the bank had been coping well for the volumes that were coming in. Commonwealth Bank had been looking to increase their staff through temps and contractors.
The 30 June deadline was contributing to the rush by customers to get loans in place. Mortgage Choice chief executive Paul Lahiff commented that $8 billion worth of home lending had been completed by the end of January and he believed that more than $2 billion was to fund purchases of new houses.
Mr. Lahiff further added that he thought the multiplier effects in the economy for suppliers of building materials would start to show up in official economic data for March and June quarters. Mortgage Choice experience continued record growth throughout February with more than 25 per cent of all brokered home loans being for new housing.
This was good news for embattled suppliers of building materials such as Boral and CSR, who had been hard hit by falling sales last year.