Aussie Home Loans chief executive James Symond believes the increase of loans among property investors is showing significant uncertainty.
The mortgage broker posted this week a record of $20bn in home settlements for the 12 months to the end of June. It also announced a record $1.98bn in loan settlements in June, bringing its loan book to about $70bn.
Moreover, Aussie Home Loans said nearly $17bn of loans were through its Aussie-branded mortgage brokers and franchise stores.
“I’m not sure that anyone quite knows what the right solution is to curb investor growth, and what the best move in this marketplace is in these unprecedented times, but time will certainly tell,” Symond said.
“Investor flows are about 30% (of our lending), far less than other brokers which lend between 40% and 50% to investors. I have no doubt it will have some impact on us, but our brand has always attracted mum and dad owner occupiers, we’ve always had a different footprint to other brokers.”
The Australian reported that last week, “APRA told Australia’s major banks they would have to carry more capital against mortgages, with the average risk-weighting for home loans required to rise from 16% to at least 25% by the beginning of July next year.”
In a recent report, the Australian Bureau of Statistics said housing finance figures dropped 3.2% in the value of investor housing loans to $13bn.
The figures come as Morgan Stanley analysts said they expected APRA to announce further changes in 2016 once the Basel risk-weighting review is complete.
“Our analysis suggests that the majors’ mortgage risk weighting could end up at 32%, which would imply a further $9bn in capital requirements,” the analysts wrote. “We believe ANZ and CBA have responded to increased mortgage risk-weightings and investor loan growth caps (implemented by APRA) by upwardly repricing investor loans by (2.7%).”
Despite the uncertainties, Symond said: “For Aussie, we have a market share that sees a lot of blue sky. Mortgage brokers have a market share of around 51%, with plenty of room to grow to 60- 70%.”