Property investors have been a prominent force in the Australian housing market over the past two years and their importance is expected to continue throughout 2022.
The value of new loans to property investors has been on rapid growth trajectory since early in 2020, rising 86.9 per cent in the year to November 2021, Reserve Bank of Australia statistics show.
Brokers, as trusted advisors, are in a prime position to help property investors to make the most of opportunities in the fast-moving property market, NAB Executive, Broker Distribution, Phil Waugh said.
“Property investment customers look to brokers to guide them through the investment lending process. As the bank behind the broker, NAB is committed to supporting brokers to serve their customers better,” Mr Waugh said.
“With this in mind, NAB has released a report for brokers providing insights into the trends and market forces facing property investors today and into the future so they can make the most of market opportunities and growth.”
The report, called Property investors on the rise: A broker roadmap for growth, was released in partnership with CoreLogic in December 2021. It provides a practical guide for brokers that combines insights from NAB’s Group Chief Economist, Alan Oster, and analysis from CoreLogic. It also included hints and tips from expert brokers who specialise in working with property investors, demonstrating how to best support investor customers, and how to get started.
Australia’s housing market was worth a combined total of $9.6 trillion at the end of December 2021, with property values having risen by 22.1% over the year, according to CoreLogic’s latest data.
NSW and Victoria have been the most active markets for property investors, although other states are catching up, CoreLogic’s research shows.
“Investors are reaping capital gains and also benefiting from rising rents, with houses performing more strongly than units on both fronts,” CoreLogic Asia Pacific Research Director Tim Lawless said.
“Housing values are rising at the fastest annual pace since 1989 and the trend is widespread with price increases recorded in both capital city and regional areas around the country.
“While rising housing prices are putting yields under pressure, rising rents are acting as a cushion. Record low interest rates mean yields are still more attractive relative to mortgage rates than historical averages,” Mr Lawless said.
“Ongoing gains in housing values, low mortgage rates, and a wider than normal spread between mortgage rates and rental yields should see investors continue to be a force within the market.”
A timely opportunity
Mr Waugh said NAB’s report reinforced NAB’s commitment to supporting brokers by providing tangible insights from brokers who write high volumes of investor loans and practical tips and hints for brokers on how to better build, manage and grow their businesses in investment lending.
“Brokers have a timely opportunity to educate property investor customers, provide guidance and show the value of working with a trusted advisor who can cut through market complexity,” Mr Waugh said.
“We continue to see growth and momentum across the property market. While there have been disruptions over the past few years – including recent challenges emerging due to the rise of the Omicron variant of COVID-19 – the outlook remains positive.”
Simplifying and digitising the home lending experience
Understanding how to support more property investor customers is just one part of the equation.
“Australians – whether investors, first home buyers or empty nesters are looking for ways to take greater control of their finances, especially after the economic and social shocks experienced as a result of the global pandemic. We know brokers also need to feel confident about the whole home lending experience – ideally one that is fast, simple and seamless.
“As the bank behind the broker, we want to be the most reliable bank for brokers and ensure consistent service across all channels. We’ve made significant financial investment to ensure our origination process is best in market. We’re currently in the process of launching our simple home loan experience to deliver same day unconditional approval and ultimately within an hour in 2022,” Mr Waugh said.