Uptick in pre-approvals follows RBA’s rate reductions
Conditional pre-approval requests at Commonwealth Bank have risen, with recent figures showing a 12% increase nationally compared to the same period in 2024. The growth comes after the bank’s second variable rate cut of the year in May, prompting prospective buyers to act amid falling interest rates.
New South Wales recorded the largest increase in conditional pre-approval applications, up 25%, followed by Queensland at 16%. Victoria’s numbers remained unchanged.
“It’s encouraging to see more people feeling confident about their home buying options,” said Marcos Meneguzzi, executive general manager home buying at CommBank. “The Aussie dream has long been anchored in home ownership, and this rise in conditional pre-approval activity reflects a renewed sense of optimism as borrowers respond to lower interest rates and increased borrowing power.
“Conditional pre-approval is one of the very first steps when buying a home. Buyers get a sense of their budget and that helps them act quickly when the right property comes along.”
The average amount sought by home loan applicants after the May rate cut was just over $733,000, a 13% rise from the previous year. For first-home buyers, the average conditional pre-approval amount reached $546,000, representing an 11% increase, slightly below the overall growth rate.
“With our latest variable rate reduction coming into effect from August 22, this trend could continue as buyers look to leverage the current downward rate cycle,” Meneguzzi (pictured right) said.
Conditional pre-approval can offer buyers greater certainty in competitive markets, enabling them to move quickly when a suitable property becomes available. CommBank’s process allows applicants to apply online or through a Home Lending Specialist, track applications in real time, and access pre-approval for 90 days with options for renewal.
“At CommBank, we can also provide suburb and property reports, plus upfront cost estimates like stamp duty and legal fees, to give buyers added clarity as they navigate the market,” Meneguzzi said.
Borrowing capacity has increased by approximately 7% following variable rate reductions of 0.25% per annum announced in February, May and August.
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