The increasingly complex lending environment will illuminate the value of brokers and is likely to see their share of the market grow, according to one successful broker.
Speaking on The Adviser’s Elite Broker podcast, 1st Street Home Loans director and founder Jeremy Fisher shared his thoughts on the rise of investment loans and recently installed regulatory measures by APRA.
“So much is changing,” Mr Fisher remarked. “There are deadlines, there are dates… it's a new world and continually evolving.
“We're going to see lenders have to pull back from time-to-time. [But] as long as we don't see it happen across the board in one hit in one given month, there's always going to be opportunity. When you see one lender pull the pin or slow things down, another lender will perk up and say, ‘Hey, we're doing it.’
“And I guess that's the beauty of the broker proposition, [which] I think that even more so today is that the broker, what a broker can provide to a consumer, is way more than we could have five or 10 years ago. Gone are the days of a client being able to walk in the door and say, ‘What's the best rate?’ Now you have to ask them, ‘Is it owner-occupier or investment? Is it P&I or interest-only? What's the LVR?’”
When it comes to applying for a loan, Mr Fisher explained that there are many more factors to be considered than there have been previously, which is making brokers’ offering increasingly valuable to consumers.
“I won't be surprised if the broker market continues to grow because of that fact,” he said.
He noted that while he believes that there is still “plenty of opportunity” in regards to investment loans, the shifting regulatory environment does require brokers to now be “on top of things” on a regular basis.
Further, when asked if he’s witnessed an increase in people seeking investment properties, Mr Fisher explained that his business has indeed been seeing clients “dipping their feet in more”.
“One, because obviously, rates are low and rental returns are still fairly strong. I'm seeing a lot more clients over the last year or two that, rather than sell their current property and upgrade to a new one, keep their existing property and rent it out and buy a new one. So that's creating a lot more investment properties all of a sudden in the market.
“It's creating a lack of stock in the market which is fuelling prices even more so. It's a very cyclical and seasonal thing with lenders coming in and out of investment lending. And we're going to see that going forward whilst APRA have these rules in place with the growth.”
Mr Fisher’s comments come after several brokers also voiced their opinions on APRA’s new supervisory measures.