Investment changes fail to deter property investors
New data shows majority of investors still keen on property
Despite the fact that many of Australia’s banks are making sweeping changes to their investment lending policy and pricing, a majority of potential investors are still keen to make their mark on the property market.
New data from Mortgage Choice’s 2015 Investor Survey found 54% of potential investors would still look to push ahead with their investment plans despite the fact that many lenders are actively making it harder for some investors to purchase property.
Local Mortgage Choice in Robina, Renee Polden said it is clear that the majority of investors still see property investment as a lucrative investment strategy and a clever way to future proof their wealth.
“When we asked potential investors whether or not now was a good time to invest, more than 70% said yes, which goes some way to explaining why so many potential investors are not deterred by the spate of pricing and policy changes being made by many of Australia’s lenders,” she said.
In recent weeks, many of Australia’s lenders have made some sweeping changes to their investment lending policies, including but not limited to restrictions on maximum loan-to-value ratios, the removal of discretionary pricing on investment loans and increased floor rates for loan servicing.
Further, over the past week, a number of Australia’s major lenders have announced their plans to increase their interest rates for investors, with one lender actually increasing its investor interest rates by 47 basis points.
While these changes will impact all investors, Renee said it is the first timers and mum and dad investors who are ultimately hardest hit.
“Our data shows an increasing number of investors are actually Gen Y’s who are purchasing property for the first time. For many younger buyers, purchasing an investment property before an owner occupied property gives them the opportunity to purchase where they can afford while still living where they want.
“We should be encouraging these people to buy property, not hindering them at every turn. Unfortunately, the changes many of the lenders are making are putting these buyers off.”
Drilling further into the data from the 2015 Investor Survey it is clear that younger buyers are more likely to be affected by the recent spate of investment changes to policy and pricing.
“While on average 54% of investors said the changes wouldn’t affect their investment plans, the story was a little different for Gen Y buyers,” Renee said.
“Just 45% of those born between 1980 and now said the investment changes wouldn’t affect their property plans, meaning most would be affected by the changes.
“Baby boomers by comparison, were far less likely to be put off by the changes, with just 30% saying any changes would affect their property investment plans.
“If lenders are going to continue to make substantial changes to their investment lending policy and pricing, they need to consider who they are trying to impact. If the goal is to stop first home buyers and mums and dads from purchasing investment properties, then mission accomplished.
“If lenders are just trying to curb their overall level of investment activity, then perhaps they should consider pulling other levers that will impact cashed-up investors and foreign investors.”
If you would like learn more about your home loan or financial advice options call 07 5562 0748 or visit https://www.mortgagechoice.com.au/robina1
For further information or to arrange an interview, please contact:
Mortgage Choice in Robina
07 5562 0748
Australia’s largest independently-operated mortgage broker, Mortgage Choice has a national network of hundreds of franchises supported by Group and State Offices.
Its loan consultants write almost one in every 20 home loans in Australia by providing professional guidance on, and choice of, products offered by an extensive panel of leading lenders. Many provide a broader service, helping customers source commercial and personal loans, asset finance, deposit bonds and risk and general insurances.
Mortgage Choice head office pays franchisees the same commission rate for the home loans they write, regardless of the rate paid by the lender selected by a new customer, so they work in each customer’s interests to source a product tailored to their unique needs.
So, why not let our local team find the most solution for your individual needs. Contact Renee Polden at Mortgage Choice in Robina on 07 5562 0748. Or visit www.mortgagechoice.com.au/robina1 for more information.
*About the survey
Market research company Nine Rewards was commissioned by Mortgage Choice to conduct the 2015 Investor Survey. The online survey was conducted in July 2015 and completed by 1,025 Australians who were planning to purchase their first investment property in the next two years or recently purchased their first investment property.
This article is for general information purposes only. It has been prepared without considering your objectives, financial situation or needs. You should, before acting on the advice, consider its appropriateness to your circumstances.
About Mortgage Choice
Mortgage Choice is an ASX listed company that seeks to help Australians with all of their financial needs.
Established in 1992, Mortgage Choice was originally established to help Australians improve their financial situation by offering a choice of home loan providers, coupled with the expert advice of a mortgage professional.
Since that time, the company has grown and developed into a fully fledged financial services provider.
Today, Mortgage Choice helps customers source car loans, personal loans, credit cards, commercial loans, asset finance, deposit bonds, and risk and general insurance.
Further, the company offers Australians access to real, relevant and affordable financial advice through our qualified financial advisers.
Mortgage Choice has no balance sheet or funding risk, and consistently delivers strong profits and attractive yields. It listed on the ASX in 2004 (MOC) and is a member of the Mortgage & Finance Association of Australia (MFAA).
Mortgage Choice holds an Australian Credit Licence: no. 382869 and Mortgage Choice Financial Planning Pty Limited holds an Australian Financial Services Licence: no. 422854. Both licences are issued by ASIC.
Recent recognition: 2014 Australian Broking Awards Best Diversification Program; 2013, 2012, 2011 Australian Broking Awards Major Brokerage of the Year – Franchise; 2013, 2012 Australian Broking Awards Best Ethical/Social Responsibility Program; 2012 Australian Broking Awards Best Training and Education; No.1 on The Adviser magazine’s 2012, 2011, 2010 and 2009 Top 25 Brokerages list; 2012, 2010, 2009, 2008, 2006 and 2005 MFAA Awards Retail Aggregator/Originator of the Year; 2011, 2010, 2009 and 2008 10 Thousand FEET Top 10 Franchise list; 2010 Forbes Asia-Pacific Best Under A Billion list.
Visit www.mortgagechoice.com.au or call customer service on 13 77 62.