Morning Briefing: Major broker sees investor lending hit 6-year low

Investment lending dropped to its lowest levels in six years... Agency falls foul over rental income guarantees...

Major broker sees investor lending hit 6-year low
Investment lending dropped to its lowest levels in six years over the December 2015 quarter according to the latest figures from one of Australia’s biggest mortgage brokers.

Figures released yesterday by AFG show that investment loans accounted for only 31% or mortgages during the quarter, down from the 33% they accounted for in the September 2015 quarter. The December 2015 quarter figures are the lowest since September 2009, when investment loans accounted for 29.8%. 

AFG general manager sales and operations Mark Hewitt said the figures for the last three months of 2015 give a good indication of the changes seen in the Australian real estate market over the past year.

“2015 was a year of adjustment for both borrowers and lenders,” Hewitt said. “A shift in requirements for lenders set down by regulators saw many changes to lending policy and interest rates resulting in a level of confusion amongst borrowers. A long period of low interest rates has many people predicting an upward swing may be on its way in 2016.”

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Agency falls foul over rental income guarantees
A Western Australian based real estate agency has fallen on the wrong side of the state’s Department of Commerce in relation to advertisements it made about properties for sale.

Macro Realty Pty Ltd and its directors, Desiree Veronica MacPherson and Renee June Smith, have agreed to enter into an enforceable undertaking after WA Consumer Protection found rental income guarantees contained in the advertising of properties for sale in the regional town of Newman were unsubstantiated.

According to Consumer Protection, between May 2015 and September 2015 Macro Realty Pty Ltd advertised properties for sale in the Newman Estate with a guarantee that each property could be leased for 12 months at a particular rate of rent.

The enforceable undertaking requires Macro Realty Pty Ltd to remove all advertising claiming properties will generate a particular rate of return and not make similar claims in the future.

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