Interest-only lending recovers
One of the challenges for investors over the past 9½ years has been the huge crackdown on interest-only lending, making it hard for cashflows to stack up on a residential property investment.
After almost a decade, it seems that finally there are some nascent signs of life in this sector of the market, with quarterly loan flows rising to around $37 billion.
Interest-only loan balances total less than $250 billion, or around 10 per cent of term loans, which represents an enormous reduction over the past decade, from close to 40 per cent at the highs.
Still, IO lending accounts for only around a fifth of new lending, so there's scope for some increase here.
Despite this, lending standards remain very tight, with a 3 percentage points lending assessment buffer in place.
In his
new Substack, Cameron Kusher also notes how low-deposit lending and high-LVR lending levels are very low, while the typical loan is being assessed for an extremely conservative mortgage rate of 9.3 per cent.
Non-performing loans remain at historically low levels, at
around 1 per cent for owner-occupiers, and about 0.6 per cent for investors.
Indeed, it looks as though loan arrears and impairments peaked late in calendar year 2024.
---
In other news, Stats NZ reported that Kiwis are leaving New Zealand in record numbers as the economy struggles, and the income disparity with Australia grows.
From Stats NZ:
The AFR reported that some 15 per cent of New Zealanders now live in Australia.
---
P.S. Whenever you’re ready…here are 4 ways I can help you:
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with well over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog with some 3¾ million hits here.
You can also catch up with me daily on Twitter here, where I'm active daily and have over 14,900 followers.
By the way, I'm an 8-times published author on finance and investing, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - follow our book release on Facebook here and at our Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
