Can Property Investors Still Get Loans?

Graeme Salt

The Reserve Bank is going to clamp down on speculative investors we hear. Is that going to make it much harder for property investors to get a loan? Probably not.


The truth is that a calming market is taking out most of the hysteria itself and, as a result, there is no need for knee-jerk reactions. Sure, the annual growth in home values in October was 13.1 per cent in Sydney and 8.9 per cent in Melbourne, according to RP Data. But, growth projections for next year are something like five to seven per cent in key markets.


Because some sanity is coming into the market, it appears that the Reserve Bank is less likely to make things tough for property investors. The RBA Governor recently said "It would be more something aimed at ensuring that lending standards and capital adequacy ratios for investor loans are up to scratch." 


Such measures are more concerned with how banks run their own business and will have no immediate impact on home borrowers. This week, it was reported that Moody’s Analytics believed local house prices to be close to ‘fair value’ when assessed against interest rates, rents and incomes. As a result of the above, the banks are still likely to want to lend to investors. Indeed, Westpac’s Chief Economist recently said "If I look at our own portfolio of investor loans, for a start they are much older borrowers, their incomes are much higher, 65 per cent of them are ahead of their repayments and the default ratio in the investor is lower than the non-investor book."


“This makes investors attractive for banks."


"We are very happy with our investor book and I expect other banks are in the same position."


For those of you looking to invest in property in 2015, there may well be plenty of opportunities out there.


Graeme Salt is a mortgage broker with offices based in Sydney and Melbourne.  For a no-obligations consultation,   he can be contacted on 1300 30 67 67