In the face of tighter lending conditions, more property investors are choosing to use mortgage brokers to secure finance, the third annual Property Investment Professionals of Australia (PIPA) Property Investor Sentiment Survey has found.
The national survey, which gathered insights from 742 property investors, found that 73 per cent of investors used the services of a mortgage broker to secure their most recent loan – up significantly from 65 per cent two years before.
And in the next 12 months, 83 per cent of investors intend to finance their next loan through a broker – up from 71 per cent last year.
Investors are on the hunt for a better deal
By far most investors (68 per cent) think it is unfair they have to pay higher interest rates compared to owner occupiers, the results showed.
Yet, despite the changes in lending serviceability over the past two years, the largest proportion of investors (38 per cent) report no difficulty refinancing, although a significant minority (28 per cent) aren’t sure, and 22 per cent said they are having difficulty refinancing.
Given lenders are charging higher interest rates for interest-only loans, 30 per cent of investors said they either have switched or intend to switch to principal and interest repayments, however an even bigger proportion (36 per cent) said they have no plans to switch.
PIPA chair Ben Kingsley said that the survey results confirmed that sophisticated investors were prepared to use professionals to help their grow their portfolios.
“The restrictive lending environment for investors across the nation may have removed some of the speculation out of the market, but is also preventing sophisticated some investors from investing in their financial futures as well as adding to the supply of rental properties,” Mr Kingsley said.
“While parts of Sydney’s market was saturated with investors for a moment in time, the tougher lending environment has adversely impacted other markets, such as Brisbane and Perth, where the investment activity was tracking at historical averages or below.
“Our survey results show that rather than be defeated, educated property investors are opting to use professionals to assist them to achieve their goals – regardless of the lending environment.”
Mr Kingsley said that unlike financial planning and mortgage broking, the provision of property investment advice still remains unregulated.
PIPA is committed to raising the professional standards of this industry and will continue to lobby the government to regulate property investment advice and educate investors to help them make informed investment decisions, he said.
| PIPA’s 2017 Property Investor Sentiment Survey – Key stats at a glance
A copy of the 2017 Property Sentiment Survey Report is attached. For full survey results visit www.pipa.asn.au/survey2017.
NOTE TO EDITORS
The Property Investment Professionals of Australia (PIPA) is a not-for-profit association established by industry practitioners with the objective of representing and raising the professional standards of all operators involved with property investment.
Since its inception, PIPA has developed codes of ethics and conduct and professional standards of accreditation and education for the property investment industry, including a Property Investment Adviser Accreditation Course.
PIPA is actively lobbying the federal government to bring property investment advice into a regulatory framework. Until such regulation is introduced, PIPA will continue to provide the public with warnings about working with ethical and professional industry practitioners. For more information visit www.pipa.asn.au
Corporate Affairs Manager
Property Investment Professionals of Australia
P: 0405 801 979