
Most read
Pros and cons: Working in the gig economy...
Pros and cons: Working in the gig economy...

Latest Podcast
Is the market overheating; should ETFs take your fancy, and what’s happening t...
Is the market overheating; should ETFs take your fancy, and what’s happening t...

Resources
There is $17.5 billion in lost and unclaimed super across ...
There is $17.5 billion in lost and unclaimed super across ...
Invest
Major bank flags ‘worrying’ investor borrowing trends
One major bank has justified its exit from lending to SMSFs for residential property by referring to “worrying” and “dramatic” growth in the area, while the head of CoreData has blamed troublesome SMSF borrowing activity on non-traditional lenders.

Major bank flags ‘worrying’ investor borrowing trends
One major bank has justified its exit from lending to SMSFs for residential property by referring to “worrying” and “dramatic” growth in the area, while the head of CoreData has blamed troublesome SMSF borrowing activity on non-traditional lenders.

Speaking at the release of the fifth Intimate with Self-Managed Superannuation report, a CoreData report prepared for nabtrade and the SMSF Association, CoreData founder Andrew Inwood said while the large banks generally put restrictions on loan to value ratios (LVRs) and other lending criteria, this tends not to be the case with non-traditional funders.
“NAB no longer does residential loans [for SMSFs] and CBA processes SMSF loans through its business bank so it’s got to go through its banking business criteria,” said Mr Inwood.
“Most banks insist on [an LVR of no greater than 60 per cent], so you can’t turn up with 10 per cent, you’ve got to have greater than 40 per cent [of the value of the asset]. It’s the non-traditional funders that are doing those sorts of loans.”
MLC head of technical services Gemma Dale said NAB made the decision to cease residential lending for properties within SMSFs earlier in the year, following “dramatic growth in that area”.
“We didn’t have any specific areas of risk or any pockets of activity that we were particularly nervous about but we simply thought in a very large organisation there had been dramatic growth in this area – very, very dramatic growth and very large amounts of interest as well,” said Ms Dale.
Ms Dale said it was also difficult when customers did not understand why they did not meet the requirements for an SMSF loan.
“It was quite challenging to say you need to follow all of these rules and all of these steps and if you don’t, we simply cannot do it for you. They were a little shocked at that,” she said.
“We’re comfortable with the decision. I don’t think anyone is happy seeing dramatic growth in lending in SMSFs; I think we find that a little worrying.”
SMSF Association chief executive Andrea Slattery also discussed some of the findings of the report, including the fact that ‘coach-seeker’ and ‘outsourcer’ trustees represent the biggest growth opportunities for financial advisers.
The report also found that the common barriers to SMSF set-up were lack of knowledge of SMSFs among non-trustees, at 38 per cent; balance size not justifying an SMSF, at 32.3 per cent; and too much hassle, at 30.6 per cent.
“Notwithstanding these barriers, however, close to one in five (18.6 per cent) of non-trustees with a lack of knowledge or other constraints around setting up an SMSF would consider establishing one if an accountant or financial planner could assist them in better understanding SMSFs,” Ms Slattery said.

Property
New home sales continue to soar in March
A strong level of building activity is expected in 2021 and 2022, given a strong spike in home sales during the year to March. ...Read more

Property
HomeBuilder extension announced
One of the government’s most successful schemes, HomeBuilder, has been extended, bringing the total level of expected government support for the construction sector to $2.5 billion. ...Read more

Property
Policy failures see houses become unattainable for young Australians, minister says
Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now unable to afford what their parents could, a minister has said. ...Read more

Property
House prices to grow by 25% over 3 years
New research is predicting a large gain in property prices of around 25 per cent through to the end of 2023, driven mainly by low interest rates. ...Read more

Property
Strict cap on short-term rentals delayed following criticism
Following widespread criticism from councils and online rental companies, the introduction of NSW’s planned holiday rental code of conduct has been pushed back by three months. ...Read more

Property
Melbourne becomes Australia’s 2nd most affordable rental market
While most capital cities saw house rents soar to new record highs over the first quarter of 2021, Melbourne continued to lag behind – becoming the second most affordable capital city to rent in Aus...Read more

Property
Why home buyers are now more open to high-priced properties
Buyers are more likely to spend more to secure a property as their preferences shift towards bigger spaces with higher price tags, recent data has shown. ...Read more

Property
Government brushes aside RBA’s debt blowout warning
The government said it is not concerned about the RBA’s warning that the financial system could be rocked if there’s a debt blowout, in fact it is “very pleased” that confidence levels are lea...Read more

Is the market overheating; should ETFs take your fancy, and what’s happening to the low and middle income tax offset?
Listen now

Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now

Raging floods, the tech stock bubble and the ongoing SG debate
Listen now

Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now

Property
New home sales continue to soar in March
A strong level of building activity is expected in 2021 and 2022, given a strong spike in home sales during the year to March. ...Read more

Property
HomeBuilder extension announced
One of the government’s most successful schemes, HomeBuilder, has been extended, bringing the total level of expected government support for the construction sector to $2.5 billion. ...Read more

Property
Policy failures see houses become unattainable for young Australians, minister says
Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now unable to afford what their parents could, a minister has said. ...Read more

Property
House prices to grow by 25% over 3 years
New research is predicting a large gain in property prices of around 25 per cent through to the end of 2023, driven mainly by low interest rates. ...Read more

Property
Strict cap on short-term rentals delayed following criticism
Following widespread criticism from councils and online rental companies, the introduction of NSW’s planned holiday rental code of conduct has been pushed back by three months. ...Read more

Property
Melbourne becomes Australia’s 2nd most affordable rental market
While most capital cities saw house rents soar to new record highs over the first quarter of 2021, Melbourne continued to lag behind – becoming the second most affordable capital city to rent in Aus...Read more

Property
Why home buyers are now more open to high-priced properties
Buyers are more likely to spend more to secure a property as their preferences shift towards bigger spaces with higher price tags, recent data has shown. ...Read more

Property
Government brushes aside RBA’s debt blowout warning
The government said it is not concerned about the RBA’s warning that the financial system could be rocked if there’s a debt blowout, in fact it is “very pleased” that confidence levels are lea...Read more