In this short video Carolyn unpacks the key factors currently impacting Australia’s credit environment.
The key takeaways are as follows:
– Borrowing capacity is down approx. 20% across the board, however most borrowers don’t stretch to their maximum borrowing capacities
– The national housing market has contracted approx. 6% in aggregate over the past 12 months, this plus regulatory factors (e.g. the royal commission) have impacted both credit policies and appetite for new business – it is a fast moving landscape
– Credit is still readily available, Macquarie is approving the best quality applications in 4 hours (average time to formal approval is 1 day when 100% quality documentation is provided)
– Banks are focusing on the mortgage broker channel – the undisputed channel of choice for borrowers now – and working better together to deliver a superior end to end client experience
– From a regulatory standpoint ASIC is now updating its regulatory guideline 209 around responsible lending, expect further changes around verification of income and expenses
– Comprehensive Credit Reporting is coming into play, this will provide banks with a more holistic view of an applicant’s credit scenario (e.g. reporting on good behaviour, rather than just bad behaviour/ defaults)… people who pay on time will now be rewarded
– Technology will play a bigger part in terms of driving efficiencies through the lending process
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Credit Representative Number 493530 authorised under Australian Credit Licence 389328.
