Increased measures from the banking regulator to drive investors out of the property market represent a huge opportunity for mortgage brokers, says aggregation boss John Kolenda.
The 1300HomeLoan managing director’s comments come after the big four banks and a number of small lenders have responded to APRA’s crackdown on investors by raising their interest rates and tightening eligibility criteria.
APRA’s first macroprudential efforts in 2014 backfired with the resurgence of investor lending in the second half of 2016. While a second round of curbs have been implemented, Mr Kolenda believes investors aren’t going away.
“At 1300HomeLoan, we have seen a 30 per cent increase in enquiries from investors in the March quarter of 2017 compared to the same period last year,” he said.
“The reality is that people – whether they be those looking to boost their retirement nest egg or first time buyers trying to get a leg up on the property ladder – will always view property investment as a viable option.”
Mr Kolenda said the current focus on investors is another chance for brokers to show their expertise and boost their ever-increasing share of the home finance market.
“Given the huge amount of volatility around out-of-cycle interest rates by banks and a multitude of changes to lender policies for investor loans, investors are turning to brokers,” he said.
“In most cases, it is to find a more competitive interest rate and in some instances simply to find a lender who has a home loan solution for investors having difficulty meeting the lending criteria. Many of these customers have never used a broker before and a large proportion were loyal to their existing lender.
“However, out-of-cycle rate hikes of 25-30 basis points has left many clients disillusioned with their existing lenders and they are turning to brokers in droves for a solution.”
Mr Kolenda said the last few years have been a confusing time for the lending market despite the RBA’s official rate being at record lows.
“The lending landscape has become a minefield in particular for investors and it’s playing into the hands of brokers to help them navigate through all the challenges.”