Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
subscribe to our newsletter

Lender dismisses investor loan hype

An Australian lender has dismissed the Reserve Bank’s fears that investor loans are creating an ‘imbalanced’ mortgage market.

Speaking to Mortgage Business, Firstmac owner Kim Cannon said the growing number of investor loans being written is “nothing to worry about”.

“It’s just market forces,” Mr Cannon said, adding that the high proportion of investors in the Australian market reflects a greater cultural shift among the next generation of property buyers.

Advertisement
Advertisement

“I’m just wondering whether the culture of Australian people has changed totally and this next generation don’t want that quarter acre because nobody wants to live fifty miles out of the CBD,” he said.

In recent weeks the RBA has raised concerns about the rise in investor finance, specifically interest-only loans, for properties in Sydney and Melbourne.

“The RBA is very quick to talk about property bubbles and trying to avoid property bubbles and that we are seeing investor loans go through the roof over owner-occupied loans. But let’s go back in history a bit. My generation, my parent’s generation and my grandparent’s generation – the Australian dream was to own your quarter acre and bring up your family and grow your veggie garden and live like that.”

Mr Cannon questioned whether future generations of Australians will choose to build wealth in an owner-occupied home.

“Are we seeing the future of this generation saying they will build their wealth through savings, through investments and through building wealth smarter, rather than pouring it all into the family house?

“To me, there is a culture change going on and this is being missed by everybody,” he said.

Just as the global financial crisis changed the way banks did business and created an online culture among consumers, so too will the Australian property culture change, Mr Cannon said.

“Everybody is panicking about it and there is nothing really to panic about,” he said.

Mr Cannon’s comments come after the RBA flagged the potential for lending curbs to be introduced by APRA to cool the investor loan market, which now accounts for half of all new mortgage settlements.

 

Lender dismisses investor loan hype
mortgagebusiness

Latest News

New APRA data has revealed that ANZ was the only big four bank to record negative home lending growth before the coronavirus outbreak altere...

The rapid move to support digital mortgages amid the coronavirus pandemic “will have a dramatic effect” on how people will transact on m...

Mortgage holders will be breathing a “sigh of relief” following the federal government’s announcement of a new $130-billion support p...

FROM THE WEB
podcast

LATEST PODCAST: Further relief for SMEs and borrowers

Do you think Australia will move to quantitative easing this year?

Why we’ll keep delivering for our communities in the face of COVID-19

alex

As Australia tries to keep pace with a rapidly changing business and social landscape in the wake of COVID-19, Momentum Media is leading the way delivering essential content to our communities, writes Alex Whitlock, director of Mortgage Business.

Read more

Website Notifications

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