One of Australia’s top brokers believes the major banks will look to control the quality of their home loans through their premium broker channels.
Speaking to The Adviser, House+Home Loans managing director Rael Bricker said Australian banks will look to control the volume and quality of investor home loans through their elite broker partners, who will be given access to better pricing and policy for their investor clients.
“Premium brokers will get the special pricing and higher LVRs for investors that are not open to the general broker market,” Mr Bricker said. “That will regulate the quality.”
“Those are the brokers that give you the best quality business, the least reworks. Why wouldn’t banks be chasing that business?”
Mr Bricker believes the prudential regulator failed to consult brokers – who now account for over half of all mortgage originations – and therefore has not captured a holistic picture of the Australian mortgage market.
“APRA never contacted the brokers or the MFAA, they only contacted the banks,” he said. “In that way they were only getting a 50 per cent view of the market.”
Mr Bricker believes that APRA “knee-jerk reacted” by cracking down on investor lending, using what he calls “a carefully targeted shotgun”.
“They have gone out with what I call a carefully targeted shotgun, aiming at specifics and they’ve caught everyone else in the spray,” he said. “I don’t think their guidelines are actually going to stop this swell in the Sydney and Melbourne market, if you consider that it could be being driven by non-resident investors paying cash.”
Mr Bricker – who is based in Western Australia – said that despite higher rates and tighter conditions on investor loans, he has seen very little impact to his business.
“Am I struggling to get deals across the line? Not really," he said.
"I do a lot of public seminars on investment. I do at least one a week. My message to everybody is that APRA guidelines have come in but the banks are still lending.
“They can’t afford not to lend. Yes, they are charging a slightly higher rate."
Mr Bricker said three of the four majors are “still heavily pricing investment loans” and are “still giving significant discounts that they have always done”.
Over time he expects more lenders to enter the investor loan market and rates to become more competitive as banks begin to hit APRA’s 10 per cent speed limit.
Mr Bricker was ranked fourth in The Adviser's top 50 Elite Business Writers ranking this year with $346,819,000 in total volumes.
[Related: Major bank doubles elite broker numbers]
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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