Special report: investors unfazed by lending changes

By Jack Needham and Vivienne Kelly

Two surveys released over the period of APRA-instigated bank announcements indicate that investors are largely unperturbed by changes to lending policies, with other factors more likely to influence their purchasing decisions.

Results from Smart Property Investment’s Investor Insight Survey and Mortgage Choice’s 2015 Investor Survey indicate a majority of investors are driven by market conditions rather than lending rates.

New data from Mortgage Choice’s 2015 Investor Survey, released this week, showed that 54 per cent of potential investors were still planning to continue with their investment strategy, despite the changes.

A vast majority of responses were dictated by current market conditions, according to Mortgage Choice chief executive officer, John Flavell.

“When we asked potential investors whether or not now was a good time to invest, more than 70 per cent said yes, which goes some way to explaining why so many potential investors are not deterred by the spate of pricing and policy changes being made by many of Australia’s lenders,” he said.

However, the survey did reveal that positive sentiment among younger investors has taken a dip following the announcements of recent weeks.

“Just 45 per cent of those born between 1980 and now said the investment changes wouldn’t affect their property plans, meaning most would be affected by the changes,” Mr Flavell explained.

This is in stark contrast with older investors, who are far more likely to have an existing portfolio.

“Baby boomers, by comparison, were far less likely to be put off by the changes, with just 30 per cent saying any changes would affect their property investment plans,” Mr Flavell said.

The latest Smart Property Investment Investor Insight Survey revealed investors across the country believe there are far more pressing factors driving house price growth than investors and relaxed lending standards.

According to survey respondents, housing undersupply has the most significant impact on pushing up property prices, followed by population growth.

The third most significant factor, according to investors, is low interest rates; and the fourth, the influence of foreign buyers.

The three most insignificant factors, according to the survey, were investors, relaxed lending standards and negative gearing. A total of 57 per cent of respondents believed relaxed lending standards had “little impact” in pushing up property prices, and a further 12.6 per cent said they had no impact at all. Just under 30 per cent said lending standards had a “big impact” on property prices.

By comparison, more than 78 per cent of respondents said housing undersupply had a “big impact” on property price growth, with just 19.6 per cent saying it had “little impact” and less than 2 per cent “no impact”.

APRA Special Report: 

Special report: APRA tries to take the heat out of the market

Special report: APRA changes to meet with mixed success

Special report: first-time investors hit the hardest 

Special report: pain and gain for existing investors  


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