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ISCOVER
A lot of us have made some very interesting observations in response to the ‘crackdown’ on investor lending.
I understand the government needs to protect our economy and manage the market as best they can through taking massive action. However, this doesn’t happen without some serious collateral damage.
If it keeps going this way, consumers are going to hurt. One group in particular is the purchasers of off-the-plan apartments that only had 5.0 or 10 per cent deposits. There was already only a few lenders offering solutions in this space, and changes from them are imminent – surely. Even mortgage insurers are scoring these purchases harshly with all of the changes taking place. There are hundreds of large developments scheduled to come out of the ground all over Melbourne, and people are going to struggle to find products that cater to this market.
I don’t think this will be a short-term problem either. The chain reaction could affect more than just the projects that were marketed to this buyer demographic, and even hurt the bank that funded the project. It will certainly affect the developer, the builder, the marketing groups involved. And of course, the customer could lose their hard-earned deposit, which was put down when it was possible to get funding. Some banks aren’t even honouring the pre-approvals they had issued prior to the changes coming in, so they certainly aren’t going to honour a pre-approval from 12 to 18 months ago.
Which brings me to my last point: even in adverse conditions, there are always opportunities for those willing to innovate and embrace change. This could be a huge opportunity for lenders to design a solution for these people. Otherwise, it looks like we’ll be needing all the foreign investment we can get.
Sean Murphy, senior credit adviser, My Mortgage Freedom
Starting his finance career at Liberty Financial in 2007, Sean developed a passion for specialist lending and the challenge of finding a solution for every client.
Having been a BDM at Liberty for almost three years, Sean decided it was time to move on and joined My Mortgage Freedom in the beginning of 2014. Sean's background in SMSF lending and non-conforming residential and commercial mortgages gives the team great scope when dealing with their clients.
Sean's objective is to work with a range of clients in different situations to assist them no matter how challenging the transaction might be.
