The End Of Buying Property Through SMSFs?

Last week Macquarie Bank announced that it will no longer be financing direct investment property purchases through SMSFs, and will also stop accepting guaranteed loans from parents, in what has been known as borrowing from the ‘Bank of Mum and Dad’. Macquarie was one of the last loan providers to provide non-recourse loans to SMSFs, after CBA, Westpac, ANZ and NAB ended the practice last year.

The ‘Bank of Mum and Dad’, was estimated to be the 10th largest lender in Australia at the peak of the property boom, bigger than ME Bank and AMP Bank. Younger property buyers are increasingly reliant on parents to get into the property market because of high prices, static wages, difficulty saving deposits and increasing lender caution. Prior to the changes, banks allowed family members, such as parents, to use the equity in the family home as security for their children’s loan.

The changes are further evidence that lenders are increasingly concerned in writing loans to investors with little risk of failing to service that debt. This heightened caution is likely the result of the recent Royal Commission and an emboldened ASIC.

Certainty Property offers a rental guarantee whereby we will continue to pay the agreed market rent in the event that your investment property is in arrears or is untenanted. To discuss how Certainty Property can help you, please give us a call on 1300 577 298 or write to us at info@certaintyproperty.com.au