The chairman of a national broker group believes banks will continue to adjust the pricing and policy of their mortgage products as they seek to grow their investor loan books as close to APRA’s 10 per cent limit as possible.
Loan Market chairman Sam White told Mortgage Business that all Australian banks will be looking to achieve investor credit growth as close to 10 per cent as possible without overstepping the regulator’s speed limit.
“No one is going to get any awards for being at 9.0 per cent,” Mr White said.
“You’re going to want to be at 9.9 per cent but not 10.2 per cent,” he said, adding that banks will all have different levels of run-off on their mortgage books, creating further complexity to growth targets.
“I think there will be a lot of changes still as banks try and work out how to nudge the Queen Mary into dock, so to speak. You have to be so delicate at getting in at 9.99 per cent and not 10.01 per cent that there will be a lot of minute changes as we get closer to year-end dates.”
Mr White said the current definition of investors may also change over time.
“How we define an investor might be very different in 12 months’ time,” he said. “You are getting many different subsets of investors now.”
Some examples Mr White cited include first home buyers that can only afford to enter the property market by living at home and purchasing an investment property, long-term professional investors looking to create wealth through property investment, and those investing in a property that they will live in during retirement.
“The term ‘investor’ now is so broad…it’s not nearly as informative as it once was,” he said. “Over time there may well be changes in the way we classify investors.”