New insight into Australian home loan borrowers reveals that market activity is increasingly dominated by purchasers leveraging other properties to acquire new homes.
The Consumer Access to Mortgages 2023 report by Agile Market Intelligence in association with the Finance Brokers Association of Australia (FBAA) reported that borrowers who were granted a mortgage in the last 12 months were more likely to have secured the mortgage with property – either to refinance, or to fund a property investment purchase compared to those who secured their mortgage outside the last 12 months.
In the FBAA’s view, this data adds more weight to recent claims that Australia’s middle class is diminishing, with those able to access finance increasingly already owners of one or more properties.
The report further revealed that refinancing climbed from an average of 14 per cent to 20 per cent over the past 12 months, while owner-occupier mortgages, which had averaged 47 per cent, dropped to 41 per cent.
FBAA managing director, Peter White AM, said the figures confirm that the gap between the “haves and have nots” is widening.
“We are seeing people struggling under rate pressure and at the same time those with assets and means taking advantage of the market and investing,” he said.
While the report noted that many of those who refinanced did so to relieve mortgage stress, it also revealed a clear trend in increasing investor activity.
Over the past 12 months, investor activity climbed from 29 per cent of borrowers to 32 per cent. And according to FBAA, a further one in five Australians are actively looking to invest in property over the next 12 months.
While it’s clear many Australians are finding it hard to get onto the property ladder, and some owner-occupiers are struggling to hold on to their asset, Mr White advised that mortgage brokers could be harnessed for their property expertise in such matters.
“Every day, finance brokers are helping each person create a path forward that is in their best interests according to their individual circumstances,” Mr White said.
His advice to borrowers is to “block out the wider noise” and ask yourself what is best for you at this time.
“For example if your bank tells you that refinancing is impossible, don’t accept that until you explore all of the options, which a broker can give you.
“Conversely if you have equity in your home or can access enough for a deposit, then an investment property may be a good option for you now,” he said.
