PIPA survey suggests lender restrictions are creating major refinancing opportunities for brokers
70% of investors believe now is a good time to invest in residential property, according to a survey by the Property Investment Professionals of Australia (PIPA).
PIPA surveyed 742 investors, finding that 61% were looking to purchase a property in the next six to 12 months, up from 58% last year.
PIPA chair and broker Ben Kingsley wrote the results suggest that “investors have continued to shake off the noise about a property “bubble”, concerns about oversupply of apartments and proposed changes to negative gearing to focus on the long-term benefits of property.”
Investors have been hit by lending changes, however: 43% said these changes had made it harder for them to secure finance. Whilst interest-only loans have come into the spotlight from APRA and ASIC, more than half of investors with IO loans said they won’t struggle to meet principal and interest repayments once their IO period expires.
The refinancing opportunity
Brokers have an enormous opportunity to service investor clients, PIPA’s survey suggests. 81% of investors intend to finance their next loan through a broker â€“ up from 71% last year.
Rising interest rates, particularly for IO borrowers, have not gone unnoticed by investors. A quarter of investors said they would consider refinancing their loan for an interest rate differential of 0.5%, while another quarter would consider refinancing for 1%.
Refinancing still appears to be an option for many investors, with 38% reporting no difficulty refinancing, although 22% had encountered difficulties.
Rentvestors growing in strength
PIPA’s survey also provided more evidence of the rise of the ‘rentvestor’ â€“ borrowers who invest in property whilst themselves living in rented accommodation or their parents’ house. 62% of survey respondents say they would consider this strategy.
Other surveys suggest that rentvesting is growing in popularity beyond the investor space. Comparison website Mozo recently claimed that rentvesting now accounts for 1/3 of all Australian property investments, accounting for $202 billion of loans. This appears to represent a jump since July, where a separate Mortgage Choice survey found one-quarter of investors were rentvestors.
MPA – Mortgage Professionals of Australia, 6 October 2017