Mortgage Choice’s annual Investor Survey revealed that 42.6 per cent of Australian investors said that they were affected by stricter investment lending rules, up nearly 10 per cent from last year’s figure of 33 per cent.
However, Mortgage CEO John Flavell says that the results of the survey are not that surprising, especially considering the current status of the investment lending industry.
“Some lenders have changed their policy, making it harder for would-be investors to qualify for a loan, while others have modified their pricing by lifting their interest-only home loan rates,” he said.
The Investor Survey also shows that 51.5 per cent of Australians believe that the degree of investor activity might drop in the next two years, with these changes possibly forcing potential property investors out of the spotlight and into the sidelines.
According to Mortgage Choice, this major market shift can be “largely attributed” to the Australian Prudential Regulation Authority’s decision to crack down on investment (and particular interest-only) lending.
“As our data shows, this spate of investment lending changes are starting to affect property investors. Some investors are forced to look beyond their traditional lender in order to obtain finance, while others are choosing to reassess their intentions to buy a property and/or put their plans on hold indefinitely,” Mr Flavell said.
Mr Flavell concluded that Australia’s property market has become “increasingly complex”, but argued that in his 25 years of experience in the finance industry, he had “never known the mortgage market to be this complex and confusing”.
[Related: Investor lending slowdown continues]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.