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Recent regulatory changes to the Australian mortgage market have led an increasing number of property investors to turn to mortgage brokers for help securing their finances.

According to a recent survey from the Property Investment Professionals of Australia (PIPA), 73% of investors used a mortgage broker’s services to secure their most recent loan – an increase from 65% two years before.

Furthermore, 83% of investors surveyed intended to finance their next loan though a broker – up from 71% last year.

Investors want a fair go

Recent intervention from the federal government and the Australian Prudential Regulation Authority (APRA) into Australia’s property markets have led to property investors paying higher interest rates on average than many owner occupiers – a situation that 68% of surveyed investors found unfair.

With lender interest rates rising out of cycle from the Reserve Bank of Australia’s (RBA) cash rate, 49% of surveyed investors were considering fixing the interest rate for some or all of their loans.

Facing a market where many lenders are charging higher interest rates for investment loans and interest-only loans, 30% of investors said they either have switched or intend to switch to principal and interest repayments, however an even bigger proportion (36%) said they have no plans to switch. More than 23% said they would consider refinancing their loan for a 0.5% improvement in their interest rate, while another 23% would consider refinancing for a 1% improvement.

And despite tighter lending serviceability requirements, 38% of surveyed investors report no difficulty refinancing, although 28% aren’t sure, and 22% said they are having difficulty refinancing.

Getting the pros involved

According to PIPA chair, Ben Kingsley, the survey results confirmed that sophisticated investors were prepared to use professionals such as mortgage brokers to help their grow their portfolios:

“The restrictive lending environment for investors across the nation may have removed some of the speculation out of the market, but is also preventing some sophisticated investors from investing in their financial futures as well as adding to the supply of rental properties.”

“While parts of Sydney’s market was saturated with investors for a moment in time, the tougher lending environment has adversely impacted other markets, such as Brisbane and Perth, where the investment activity was tracking at historical averages or below.”

“Our survey results show that rather than be defeated, educated property investors are opting to use professionals to assist them to achieve their goals – regardless of the lending environment.”

The 2017 Property Investor Sentiment Survey is PIPA’s third annual survey, and gathered insights from 742 property investors.



Mark Bristow, RateCity, 26 October 2017