Investment lending suffers biggest fall in 7 years

by Julia Corderoy11 Nov 2015
Investment lending has suffered the largest fall in seven years, news figures reveal, as the regulator crackdown hits the market in full swing. 

According to the latest housing finance figures released by the Australian Bureau of Statistics (ABS), the value of investment lending tumbled 8.5% in September. 

The total value of housing finance commitments dropped 1.6% over the month, buoyed by a 3% rise in finance for owner-occupied home loans. 

In total, investment loans made up approximately 36.9% of all loans written over September, down from 39.4% in August and 41.4% in July.

According to Mortgage Choice chief executive officer, John Flavell, the drop in the total value of investment lending is not surprising, however, he told Australian Broker that brokers should not be concerned.

“While the value of investment lending has fallen slightly over the last month, our data shows mortgage brokers are still writing a significant amount of investment loans. 

“While the product and policy changes being made by some lenders may impact some buyers, it will not put the majority off purchasing investment properties. As such, there is still plenty of investment activity happening and plenty of business for brokers.”

However, Flavell says brokers should be preparing now to future-proof their business against changing housing market conditions.

“In this market, diversification is key. Not only does diversification allow brokers to future proof their business against any down-falls in the home loan market, but it also helps them create better relationships with their customers,” he told Australian Broker.

“Our research indicates that the majority of customers want their mortgage broker to offer them more than just home loan advice. Customers increasingly want to deal with finance professionals who can handle all of their financial needs and help them meet all of their financial goals. Through diversification, brokers are better positioned to help their customers with their growing financial needs.”
 

COMMENTS

  • by Broker 11/11/2015 10:35:38 AM

    And the benefits of this APRA interference is what?

  • by Maria Rigoni 12/11/2015 9:59:59 AM

    All this so called regulator concern is a nonsense. The system is being clogged by too many product choices, too much Loan to Value or interest payment type interest rate discrimination to allow gouging of hard working responsible borrowers income. The extra interest being paid to lenders because of regulator encouragement would be better used if spent in the economy.

  • by Andrew 13/11/2015 8:00:13 AM

    APRA banned local investors but rich Chinese ones don't go to our banks to get loans. Thus, our local investors suffer while overseas investors laugh at incompetent regulators like APRA.