Finsure and 1300HomeLoans’s managing director on the resurgence of offers for property investors.
Investors are back in favour just a few months after a crackdown from banking regulators threatened to force them out of the property market.
Lenders who answered the call from APRA to make life difficult for investors by raising their interest rates and tightening eligibility criteria are now competing for their business again.
As we anticipated at 1300HomeLoan, investors were never going to disappear. We actually had a significant increase in enquiries from investors at the start of the APRA campaign earlier in the year and their interest has not waned.
After the hit to their own investor volumes, lenders have been offering investors more competitive interest rates to attract their business and the battle for the investor market is now fierce.
CUA is one lender to jump back into the investor market after acknowledging its inability to write investor loans to meet APRA’s requirements had hurt business.
Not only was the investor stance preventing CUA from attracting new members, but the lender reported that its ability to retain existing clients was severely depleted.
The credit union is currently offering investor home loans to new members who concurrently apply for an owner-occupier loan, and has just dropped its fixed rates for investor loans by 10-20 basis points.
The nation’s largest mortgage lender, CBA, is cutting rates on interest-only investment loans and is also targeting fixed-rate investor loans to lure borrowers with $1250 rebates for investment and owner-occupier principal-and-interest home loans.
Increased regulation of the lending market has been a necessary response to the global financial downturn.
But Australia’s eternal obsession with property is a tough nut to crack and the forces unleashed this year have failed to curb investors.
According to the recently released 2017 PIPA Annual Investor Sentiment Survey, 70% of investors believe now is a good time to invest in residential property, while 61% will look to purchase in the next six to 12 months.
The market has spoken and lenders have already responded.
John Kolenda is the co-founder and managing director of aggregator Finsureand 1300HomeLoan. BRW Magazine included Finsure in its Fast 100 list of most rapidly growing companies in 2015 and 2016. John has also founded the Aura Group, a boutique corporate advisory and investment house, with over $150m in assets under management.
MPA (online), 29 September 2017