A Sydney mortgage broker says lenders are continuing to wind back their activity in the SMSF space in order to hit their APRA targets, making it a "struggle" for funds with less than $200,000 to secure a loan.
Late last year, Thrive Investment Finance owner Samantha Bright told Mortgage Business' sister publication SMSF Adviser that the SMSF borrowing landscape had taken a hit since APRA announced curbs on investor lending.
Ms Bright believes lenders are still "dialling down" their activity in the space, with some of the smaller players, like credit unions, leaving the market altogether.
"The banks are saying they’re purely pulling back because of their investment lending targets. They don’t see this area as risky. They would say it if it was," Ms Bright told SMSF Adviser.
In fact, Ms Bright said one of the non-major lenders recently cited SMSF lending as "one of the most profitable part of their books".
Given the nature of the market at the moment, it's a significant challenge for SMSFs with a balance of $200,000 and under to secure a loan.
"If you don’t have $200,000 in your fund, it's a really tough exercise. For those larger funds, it's absolutely still possible for them to buy property, it comes down to the strategy," Ms Bright said.