• 26/02/2024

The residential property market is dead! Long Live the commercial market!

The residential property market is dead! Long Live the commercial market!

Bank lending is dead! Long live the non-bank lenders!

Are you equipped to cope with the tectonic shifts that are taking in property and finance?

The past five years have seen major growth in the residential property market in the eastern states – and the banks have done very well out of it.

But now, it is clear the game has moved on; the next few years will see growth in commercial lending and growth for the non-bank lenders.

The banks are now making it harder to get a home loan, causing prices to pull back. And for the $500bn in interest-only loans due to expire in the next four years, things could get really tough when they have to start paying principal as well as interest!

Spotting a major opportunity are the non-conforming lenders who do not face the same regulatory pressures as the banks. The broker sector is now seeing major expansions from lender such as Pepper, Liberty and La Trobe who are actively recruiting staff, anticipating a surge in loan applications.

And Bluestone has just launched a competitive Near Prime loan at 4.29 per cent as it looks to finance Mums and Dads who cannot get finance with the banks.

Securitised lending grew by 5.9 per cent in Q2 of this financial year

But the banks are not standing idly by, as the residential market calms down, many are now focussing their attention their commercial lending. NAB’s economists are forecasting business credit growth will exceed housing loan growth during the year to June 2019

Those who will succeed in the coming years are those who can pivot their businesses. If a broker has been writing lots of loans with the Big Four, its time to talk to the non-conforming lenders.

If the broker has been doing lots of residential loans, why not talk to your self-employed clients to see if they need commercial finance?

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