Table of contents
Are property investors more pandemic resilient than homeowners? - featured image

Are property investors more pandemic resilient than homeowners?

Property investors seem to have an easier time keeping up the mortgage repayments than homeowners.

One way the Morrison Government built a bridge to get us across to the other side of the Coronavirus induced recession was to give mortgage holders a holiday ( a deferral) on their repayments. Coronavirus – How Will It Impact Australia’s Property Markets

This initiative was scheduled to end in September causing some concern about a financial cliff that we were all going to fall off – of course this didn't happen. 

While the end date for many of these deferrals has now been extended to March next year, all the big lenders are reporting that loan deferrals are declining and many of the mortgagees are back to repaying the debts.

Recently the Commonwealth Bank reported a huge reduction in loan deferrals, with 52,000 loans remaining from a total of 210,000 loans, a decline of 75 per cent.

Property investors in a better position

Non bank lender Firstmac was quoted in the Australian Financial Review as saying that home loans to investors are more robust than those to owner-occupiers and few will need to resort to hardship measures beyond March, but a portion of owner-occupier loans will need support for some time.

More of the non-bank lender's $7.2 billion in owner-occupier loans have sought repayment holidays and reduced payment agreements than loans to investors, which made up its remaining $5 billion worth of mortgages.

Firstmac chief financial officer James Austin told the AFR that while owner-occupier loans have improved faster – those subject to hardship measures fell from 3.5 per cent in May to 2 per cent in October – they were unlikely to go back to normal by March next year when investor loans did.

"Our experience over two decades is investor loans are a better credit risk, which is counter to the generally accepted proposition that owner-occupiers are better," Mr Austin said.

"Even if they go to a point where the [investor] owner themselves has lost their job and income, they always have the option of selling that property. If we were to suffer loses that would be more likely on owner-occupiers than the investor book."


Source: Australian Financial Review

What the regulator says

Figures from banking regulator APRA show there was $1.8 billion worth of loans – 7.4 per cent of the combined $133 billion loan book of the country's banks – subject to payment deferrals as of September 30. Big lenders CBA, Westpac, ANZ and NAB all say deferrals are declining.

Exits from deferral continued to outweigh new entries for the third straight month in September, with $66 billion loans expiring or exiting deferral and $17 billion of entries approved or extended.

The pace of exits increased significantly over the month, with total exits increasing 169 per cent from $24 billion in August.

The majority of these loans have returned to a performing status.

Temporary Loan Repayment Deferrals Industry Publication September 2020 0

Now is the time to take action and set yourself for the opportunities that will present themselves as the market moves on


If you're wondering what’s ahead for property you are not alone.

You can trust the team at Metropole to provide you with direction, guidance and results.

In “interesting” times like we are currently experiencing you need an advisor who takes a holistic approach to your wealth creation and that's what you exactly what you get from the multi award winning team at Metropole.

If you're looking at buying your next home or investment property here's 4 ways we can help you:

  1. Strategic property advice. - Allow us to build a Strategic Property Plan for you and your family.  Planning is bringing the future into the present so you can do something about it now!  This will give you direction, results and more certainty. Click here to learn more
  2. Buyer's agency - As Australia's most trusted buyers’ agents we've been involved in over $3.5 Billion worth of transactions creating wealth for our clients and we can do the same for you. Our on the ground teams in Melbourne, Sydney and Brisbane bring you years of experience and perspective - that's something money just can't buy. We'll help you find your next home or an investment grade property.  Click here to learn how we can help you.
  3. Wealth Advisory - We can provide you with strategic tailored financial planning and wealth advice. Click here to learn more about we can help you.
  4. Property Management - Our stress free property management services help you maximise your property returns. Click here to find out why our clients enjoy a vacancy rate considerably below the market average, our tenants stay an average of 3 years and our properties lease 10 days faster than the market average.

About Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media.
No comments


Copyright © 2024 Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts