Aussie Parramatta franchisee Ross Le Quesne says some of his clients have started to feel the weight of APRA’s investor lending crackdown.
Mr Le Quesne told The Adviser that since the regulator announced a 10 per cent investor cap, which saw lenders up their rates and initiate a string of policy changes, clients with larger portfolios have been impacted.
“It effects the people who have bigger portfolios. Generally my clients buy cheaper properties in an area of probably between $200,000-$350,000 purchase prices where they’re getting good rental yields,” he said.
“In the previous lending criteria they were able to grow a portfolio fairly quickly because they had the borrowing capacity to do that.”
However, since the new changes have come in, Mr Le Quesne has seen his clients becoming increasingly restricted in their ability to continue growing their multi-million dollar investment portfolios.
Aussie’s top loan writer explained that for a client with a $3 million portfolio, changes to loan serviceability mean they would now have to fork out thousands of dollars more to continue investing.
“Rather than a lender assessing the client at $45,000 on a million dollars, they’re now assessing them on about $86,000 or $90,000,” Mr Le Quesne said.
“Over a $3 million portfolio, that means that client has to earn an additional $120,000 income.
“People just aren’t getting $120,000 pay rises, so those people are definitely going to find it harder to continue to grow their portfolio in this current market.”
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.
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