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Specialist lender Bluestone Home Loans is continuing to seek new business from brokers’ investor clients, though its chief commercial officer Tony MacRae warns 2025 could be “more of the same” for these borrowers.
The non-bank has extended a time-limited waiver of the 0.3% investor loading on its residential investor loan products, which the lender said would give brokers a chance to save investors on their loan costs.
Bluestone has offered a similar waiver a few times this year. MacRae (pictured above) told Australian Broker this was because investors continued to be a strong segment in the current market.
ABS data from September 2024 showed a 29.5% year-on-year increase in loan commitments to new investor borrowers, which Bluestone said indicated “rising interest in property investment”.
“As interest rate non-movement has continued to be the outcome of the RBA’s deliberations, we are supporting this significant part of the market by providing some interest rate relief,” MacRae said.
MacRae said the investor segment of its lending portfolio was proving to be “very strong”, and from an arrears perspective was performing much stronger than other parts of its mortgage book.
The waiver has been a success for Bluestone in causing an uptick in lending to investors.
“Before the waiver, about 30% to 40% of lending in any given week would be to investors, but since the waiver that is now at about 40% to 50%, so the reaction has been really positive,” MacRae said.
The lender’s waiver offer applies to Bluestone’s residential investor home loans, excluding SMSF loans, for applications submitted from now and settled within 90 days from the application date.
Bluestone has also recently changed its minimum apartment size requirement for investors from 50 square metres to 40 square metres, which it said was aimed at investors in metro areas.
MacRae said the changes reflected what was going on in the market in terms of unit sizes, with the lender happy that smaller apartments had not impacted the risk or strength of the investor portfolio.
The biggest change for brokers and their clients, MacRae said, has been a recent change to post code exclusions, which means Bluestone now looks at a deal based on its merits, and has dropped “no go” post codes.
According to Bluestone, the post code changes have been particularly well received by finance brokers in states such as Western Australia and South Australia, as well as in other regional areas.
“The post code changes are really important for us and are a direct result of broker feedback; we were getting feedback they were not able to provide customers our solutions in certain areas,” MacRae said.
Though there are hopes of improved conditions in 2025, with potential interest rate decreases on the horizon, MacRae said next year could yield essentially “more of the same” for investor clients.
“Any downward movement in interest rates will be positive for the overall market, including investors, but we are not yet over the inflationary pressures,” he said. “So as to when there will be a downward movement in rates, that is probably less clear today than it was, say, a month or so ago.”
While there’s still a possibility of a rate cut in February, MacRae said other global forces could put pressure on inflation, and the RBA will not want to see the return of inflation growth.
While Bluestone is expecting some relief for interest rates, the RBA will be “treading warily”, leading to a market that mirrored conditions this year.
