Investor tide already turned before APRA action

Patrick Bright of EPS Property Search on Sydney’s lower north shore, author of four books on real estate investment, told Mortgage Business that as a buyer’s agent, his client base is, on average, split fairly evenly between investors and owner-occupiers, but this can swing dramatically throughout the property cycle.

“The last three years has probably been 60/40 [in favour of] investors. But it's probably swinging back to more owner-occupier at the moment, so currently right now it's probably 60/40 owner-occupier,” he said.

Mr Bright said he had noticed the shift at "the start of the year”.

“I think the APRA changes ... it is too early to look at the hard data and tell, but I think my gut feel and experience in the last couple of months since they made those changes, I think it has taken a bit of the speculative investor heat out of the market,” he said.

While the regulator is unpopular at present with many in the mortgage market, Mr Bright believes something had to be done to reduce the amount of speculation in the Sydney housing market.

“I'm seeing a lot of people borrowing or leveraging very aggressively. I think anyone who is borrowing in their super fund, using probably more than 30 per cent of the super fund assets ... more than 30 per cent of the super fund's assets are in one asset, I don't think that's a smart thing,” he said.

Mr Bright’s comments come as frustrated brokers are hitting out at APRA’s “scatter gun” approach to investment lending, telling Mortgage Business’s sister publication, The Adviser, of the knock-on effects these measures are having on their clients, acting as a dampener at a time of already-weak consumer and business sentiment.

“How is lifting an existing investor’s rate by 47 basis points impacting on new investors?” lamented Simon Norris, director of Go Loans.

“If the pool of investors reduces then so does the need for properties to be built,” he said. “Fewer properties means an increasing imbalance in the supply/demand equation, ultimately pushing prices up.”