Powered by MOMENTUM MEDIA
subscribe to our newsletter

Investor lending makes regulators nervous

As investor lending reaches a record high, RP Data believes banking regulators may become concerned and consider taking action.

New data from the Australian Bureau of Statistics shows the value of investment finance commitments reached $11 billion in April, an increase of 29.8 per cent over the previous year.

Investors now account for 39.4 per cent of the market or 47.8 per cent when refinances are excluded.

These figures are close to the highest levels since 2003, the tail-end of the last property boom, according to RP Data research director Tim Lawless.

Given such frantic investment activity, Mr Lawless warned banking regulators may "show signs of being uncomfortable" with the level of housing market investment.

Advertisement
Advertisement

PROMOTED CONTENT


“Compared with this time last year, investors may now find it harder to secure a property with changes to solid investment fundamentals, particularly in the cities where capital gains have been significant and yields are low,” Mr Lawless said.

Mr Lawless said investment lending was currently outpacing growth in capital city home values.

“Since values reached their recent trough in May 2012, home values increased by 16.1 per cent to April 2014 compared to a 59.2 per cent rise in the value of investment lending,” he said.

At the same time, gross rental yields are decreasing across the capital cities.

In May 2012, yields across the capital cities were at 4.3 per cent, while currently yields are at four per cent.

 

Investor lending makes regulators nervous
mortgagebusiness

Latest News

The chairman of the financial services regulator has resigned from his position, effective immediately. ...

Refinancing settlements for the first nine months of the calendar year 2020 are up 27 per cent on last year’s volumes, having peaked in Ju...

The Tasmanian-based lender has seen a 43 per cent rise in settlements in the first quarter of the financial year, driven by strong demand fr...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Victoria’s surprising appetite for new homes

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.