The chief executive of Mortgage Choice has taken aim at the Reserve Bank, saying talk of curbing property investor activity was fruitless and perplexing.
Michael Russell criticised the central bank for flagging potential regulatory intervention to curb investor activity in the housing market at the company’s annual general meeting on Wednesday.
He told shareholders it seemed “fruitless” to be curtailing demand when regulators should be working instead to fix the lack of supply of affordable housing.
He said he was “perplexed” as to why investors were being singled out, at a time when the government was encouraging people to invest and set themselves up financially for their retirement.
“It seems to be undermining their desire for us to self-fund our retirement, given we’re all living longer, it’s kind of counterintuitive,” Mr Russell told AAP.
“For the government to intervene to cool housing demand is fraught with danger because the housing markets outside of Melbourne and Sydney are certainly not booming.
“We haven’t seen any relaxation of lending credit standards by the banks and non-bank lenders.
“We’re also seeing mortgage arrears running at an all-time low, so a lot of their concerns seem, to me, to be quite unfounded.”
Mr Russell said housing was vital to Australia’s economic growth as a very significant employer, even more so now given the slowdown in mining investment, which is why it didn’t make sense to be curbing demand at this time.
Earlier, shareholders heard that Mortgage Choice had enjoyed a strong start to the year, having written $3.3 billion worth of home loans in the three months to September, up 12.5 per cent from the previous corresponding period.
Mr Russell said an increase in the number of loan writers meant the company was well placed for further growth in its mortgage broking business in FY15 and expected significant growth in its new financial planning business.
FY15 was expected to be another strong year thanks to “ferocious” tailwinds in the housing market, after a phenomenal FY14, he said.
“We rode the tide last year, and the tide was up circa 19 per cent in new home loan flows… it was very joyous for us,” Mr Russell said.
“We’d be thinking that housing credit growth this year probably will grow in the order of 12 to 15 per cent, so we still think it’s going to be a very strong market for housing.”