A net 24% of mortgage advisers say they are receiving more enquiries from investors. Alexander says this is the same reading as last month and shows the surge in investor enquiry last month was not a statistical blip.
“The situation is now markedly different from almost all other months since early-2021 when tax rules for investors changed.”
Advisers’ comments about bank lending to investors include: Not much change in this area - everything seems to be hinging on the election; tweaks to the shading of the rental income has declined, however, the actual rates and insurance expenses, in most cases, exceed the shaded allowance when a percentage of the rent was considered; no changes. 65% LVR for existing investment properties, 80% LVR new builds, 80% overall LVR for owner occupied and Investment property; inquiries are steady, however, once investors do the numbers as part of the application process and speak with their accountant, they no longer wish to proceed as they cannot make the numbers work or they are not willing to top-up the difference.
In the first home buyer market, a net 59% of the 75 survey respondents say they are receiving more enquiries from first home buyers. Alexander says this indicates the extent to which young buyers are driving the upturn in the housing market is not easing and if anything may be strengthening.
On banks’ willingness to lend, the main change in perception showed up earlier this year, Alexander says. Since that change in February things have not altered much with a net 32% of advisers last month saying that lenders are getting more willing to advance funds.
Only our first survey in June 2020 showed a higher net proportion of mortgage brokers saying that more first home buyers were seeking financing advice.
Comments on bank lending to first home buyers submitted by advisers include the following; still can't get preapprovals for high LVR > 80% without a live deal which is disappointing as you can't send them out 'house shopping' with confidence; interest rates and margins are impacting serviceability; one bank has dropped their monthly surplus requirements for over 80% lending, another is incentivizing higher cash contribution for FHBs; banks starting to look at different ways to help clients - each bank has their own interpretations of compliance within CCCFA; partners scheme running out of funds has been a bit of block for some clients; loan servicing surplus criteria continues to slowly loosen but still a tough ask with the test interest rates hovering around 9%.
Alexander says borrowers have come a long way from the deep credit crunch days of late-2021 when at one stage a net 93% of mortgage advisors reported that lenders were pulling back on funds availability.
Refinancing
A net 37% of advisers say they are seeing more people making enquiries about refinancing. This continues a string of relatively high readings for this measure in place since March and likely reflects the extra hikes in mortgage rates in an environment where many people have been rolling off record low short-term fixed rates previously secured during the dying days of the pandemic.
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