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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.
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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.”
[Related: Rate hikes hit investor, refi volumes for major aggregator]
