Are borrowers fleeing one big Aussie bank?
Australians are borrowing more and it’s making them richer.
Aussie households are increasing their debt levels to invest and grow their wealth more than ever before. New data released by the Reserve Bank and the government banking regulator APRA yesterday shows Australian household debt levels are climbing – and so is net wealth. Australians are borrowing to invest and it is paying off. According to the Reserve Bank, Australian household net wealth is now about seven times household disposable annual income, up from five times in 2009. That means the average Australian earning $75,000 per year has about half a million dollars in total wealth accumulated, probably mostly in property.
Meanwhile, the proportion of Australian household income going to interest payments has fallen. Aussies are getting good loan deals, using their equity and taking advantage of low interest rates to build their family wealth.
Property investors are driving the mortgage market
Property investor home loan sales are booming while the owner-occupier market is flat. Investors are getting amazing deals on mortgages right now with variable rate mortgages starting at 3.69 per cent from Loans.com.au.au. One year fixed rate property investor home loans are now also starting at 3.69 per cent from CUA as are three year fixed rate property investor home loans with iMortgage
Are property Investors fleeing one big bank?
APRA’s latest monthly banking statistics show that ANZ Bank’s investor loan book is valued at more than $80 billion. That’s DOWN 2.4 per cent, or $2 billion in 12 months.
ANZ is the only big four Aussie bank to see its investor home loan book shrink over the last year. Commonwealth Bank’s investor loan book grew 5.1 per cent, while NAB and Westpac grew their investor books by over 3 per cent.
Does this mean that property investors don’t like ANZ Bank and are moving their loans elsewhere?
ANZ chief executive Shayne Elliott says no. Mr Elliott says the bank is being very cautious about lending to investors. Mr Elliott has even said the bank is happy to give up some market share to ensure they only lend to good borrowers who are low risk.
“We’re a bit more cautious,” said Mr Elliott.
“We are still in the market, we still want to grow … and we want to lend,” said Shayne Elliott, “We just want to be a little bit more cautious than we’ve been in the past.”
This week, S&P Global Ratings reported that mortgage stress is rising and the number of Australian home loans falling into arrears is up 25 per cent in the last 12 months.
You can research and compare property investor home loans here.