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APRA’s tightened lending measures are impacting on the ability of ‘everyday people’ to build wealth, several brokers have told The Adviser.
One year on from APRA’s investor lending crackdown, a number of brokers have shared with The Adviser how it is impacting on their customers.
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Brad Quilty of Tungsten Home Loans told the publication that while the lending curbs haven’t significantly changed how his business operates, “what we have seen is that it is now harder for everyday people to try and grow their wealth and put themselves in a position where they won’t be relying on the government to support them in retirement”.
“Although we always educate our clients around their circumstances, no amount of education will change the fact that as an investor you are now limited more by income than ever before,” he said.
“As a client gets more properties, the assessment rates applied across all loans substantially limits their ability to borrow,” he added. “I think that is somewhat unfair; it isn’t ‘responsible lending’ when we try to limit people’s ability to grow wealth.”
Chris Pearson of Eclipse echoed this sentiment, adding that lower LVR’s and higher interest rates have led to buyers “either losing deposits or putting themselves into a position that wasn’t their initial intention”.
Further, he explained that “tougher” valuation instructions have also placed “adverse” pressure on LVRs, impacting customers’ ability to complete purchases.
John Ruddick of John Ruddick Home Loans commented: “The regulation is worse than pointless. I can’t see any upside for the borrower and it slows the whole mortgage system.”
Mr Ruddick noted that, on the other hand, regulation is a “major positive” for the broking industry because borrowers are more attracted to brokers as they are fully dedicated professionals that can help guide and direct them with their paperwork.
Warren Freeman of Cosimfree Home Loans said that he believes some of the regulations “have not been thought through in regard to how they affect customers, let alone brokers”, and advises brokers who may be struggling to cope with the demands to invest in administrative support and focus on maintaining solid relationships with clients.
[Related: Major aggregator losing $300m a month in foreign investor loans]
