4 August 2015
News Update
Topics
–
Second mortgages LRPM -
“Here’s a first;
we can now do a second!”
Current First Mortgage Funding Auction Results 2 August, 2015
Bank Lending Policies (Opportunities in the
Private Market)
“Here’s a first; we
can now do a second”
Most of you are aware that over the years, LRPM has not been involved in
second mortgage financing in the private market. Well, now we are. Needless to
say, the quality of the proposed security property and exit strategy needs to
be of an investible standard, with aggregate gearing (LVR, including the first
mortgage) and pricing determined by a number of factors.
At this stage, a loan of $0.200 M to $1.500 M falls within our preferred
range.
We will not consider a second mortgage behind another private investor,
however, if we are being asked to “blend” senior and junior debt under our own
banner to obtain a higher LVR than normal private market parameters dictate,
then we will consider it.
Current
First Mortgage Funding
We continue to have significant funding available and a shortage of
quality proposals. With the capacity to settle within seven (7) days, and a
loan range of $0.300 M to $5.000 M per security (and larger amounts available
on application), call us.
You should all now be familiar with our “transition finance” approach to
private lending, but if you are not, please visit our website, or call me with
a specific proposal.
Preliminary Auction Results 2 August, 2015
Preliminary auction
results for 2 August, 2015 appear to indicate continuing resilience and
strength in the housing market, though with a cautionary tones set in Western
Australia, Northern Territory and Tasmania. ACT seems to continue to surprise
on the upside despite anecdotal views to the contrary.
Sydney has continued
to lead the way in terms of pricing increases, though results may be somewhat
skewed by strength in the upper end of the market.
We understand that
Melbourne has considerable stock coming online in the near future, and there
are observers who believe that Brisbane (will become the city of strength in
the medium term.
State
|
Scheduled
Auctions
|
Clearance
Rate
|
Victoria
|
760
|
77%
|
New South Wales
|
816
|
79%
|
Queensland
|
140
|
61%
|
South Australia
|
75
|
72%
|
Western Australia
|
23
|
44%
|
ACT
|
40
|
79%
|
Tasmania
|
8
|
33%
|
Bank
lending policies (Opportunities in the Private Market)
According to Australian Bureau of Statistics, the number of home loans
for owner occupiers fell by 6.10% in June this year, the lowest since August,
2013. More relevantly from our perspective, the value of loan approvals for
property investors dropped by 3.20%.
It is the investment market which appears to have been the main target
of Australian Prudential Regulatory Authority effort to rein in bank lending.
APRA desires to slow investment housing credit growth to 10.00% pa from the
current 10.40%pa.
Banks have toughened credit policies to meet this demand, and amid
concerns that the property market is overheating.
Though
a slowing down was widely anticipated, the size of the fall surprised experts
in view of the record low-interest environment – rates were further cut in May.
As always, opinions amongst Economists vary, but
from LRPM’s viewpoint it appears that while demand momentum in the
residential investment market continues, APRA’s aim, plus more strident
credit testing by banks may provide finance brokers with greater opportunity
to avail themselves of the private market, and we’re always here to discuss
your requirements.
