MPA asks a raft of commercial lenders for their insights on the biggest changes in the space; where brokers can find commercial clients, what support the lenders can offer them, and about their plans for the future
MPA asks a raft of commercial lenders for their insights on the biggest changes in the space; where brokers can find commercial clients, what support the lenders can offer them, and about their plans for the future
Opportunities abound in the commercial lending sector, and more brokers appear to be taking note as the number of those writing commercial loans continues to rise.
According to the latest MFAA Industry Intelligence Service report, approximately 2,400 residential mortgage brokers settled $8.2bn of new commercial loans in the six months from April to September 2016, adding to a total commercial loan book of just over $27bn.
However, APRA hinted earlier this year that it may turn its attention to the commercial loan sector, as it has concerns around the quality of lending standards deteriorating in an increasingly competitive environment.
“Given the more heterogeneous nature of commercial property lending, it is more difficult to implement the sorts of benchmarks that we have applied to residential lending. But that should not be read to imply we have any less interest in the quality of commercial property lending,” chairman Wayne Byres said at an event in March.
We asked six different lenders (three nonbanks, two major banks and a non-major) how commercial has changed in the past year; where are the best places for brokers to find clients; and what they would like to see brokers improve on. In turn, they described how they are supporting brokers dealing with commercial clients, and gave us their thoughts on APRA increasing its focus on the commercial space.
Thinktank
Apart from the significant and well-covered contraction in supply from the banks with respect to development and construction finance, there has been a noticeable adjustment in appetite from the majors who have seemingly become much more selective in terms of everyday commercial property lending. This has created a great opportunity for the nonbanks, who have been able to step into the gap with consistency of product offerings and better service propositions than the banks.
We have also been observing a steady increase in activity over the past year or so from brokers who are relatively new to commercial.
La Trobe Financial
The biggest development we have seen over the past 12 months is the increased number of opportunities presenting themselves for both us and finance brokers generally.
The combination of low interest rates, steady yields that outperform residential assets, and interest from overseas investors, combined with tightening credit conditions from the major banks, has meant that more and more borrowers are turning to finance brokers to seek alternative options, which often land in the hands of a specialist such as ourselves.
Looking at some of the key trends in the commercial property market, we have seen an uplift in the number of SMSFs acquiring commercial property … and we have also witnessed solid interest in both the office and light industrial property markets.
Westpac
The biggest trend we have seen … is an exciting change in the rise of new emerging businesses, particularly in the start-up space.
Many of these new businesses are growing new collective partnerships with like-minded business partners, moreover in areas focused on healthcare, fintech and the service industries.
Liberty Financial
What’s worked so well for commercial lending in the last 12 months is that it’s seen little change. While other segments of the market, like residential, have gone through considerable change, the commercial sector has maintained steady growth. Liberty has also experienced strong growth, and in particular we’ve seen more brokers realise the benefits of our commercial SMSF and LeaseStream products.
While we expect APRA’s heightened regulatory scrutiny of the sector to have an impact on some lenders in the future, Liberty has always focused on building a stable and responsible portfolio that can withstand changing market and regulatory impacts.
Suncorp
With more and more lenders entering this space over the past 12 months, it’s a great sign of the support the industry has for this channel. At Suncorp we have undertaken a national broker training campaign with our masterclass workshops, to share our knowledge and upskill our broker partners looking to diversify and get into commercial lending. Positive changes around simplifying the submission and approval process have been a big change in this space, which has enabled residential brokers to diversify and confidently offer commercial products to their clients.
ANZ
All the banks have been asked to maintain exposures to the property development and investment segments below a certain regulatory cap. At ANZ we continue to support our existing customers, who are well known to ANZ, with their property projects allowing our business development activities to focus on acquiring new trading businesses.
We have invested in our relationship managers and provided them with some additional training around banking trading businesses, which will help them have a much richer needs-based conversation with our brokers and their customers. It also means we can provide customers with some greater insight into the cash conversion cycle of the business and ultimately get a quicker decision.
A broker’s existing customer database is often the easiest and best place to start. By focusing on those clients they already have a strong relationship with, arranging to call in and conduct a quick financial health check is a great way to identify whether there may be existing or future commercial financing needs. Taking the time to review personal and business asset and liability positions, enquire about leasing versus owning and longer-term wealth management plans that might also include a discussion around self-managed superannuation fund options, can lead things in the right direction.
La Trobe Financial
Brokers should review their CRM to identify clients who already hold commercial property and see if there is an opportunity to refinance it for them, particularly if they have held the property for some time. The next step would be to look for self-employed clients and approach them to see if they are interested in purchasing premises to conduct their businesses from, possibly even in an SMSF structure.
Brokers could also target local small businesses by running seminars … not only could this initiative drive specific commercial loan origination, but it could help raise the broker’s profile in their local community.
Westpac
To ensure we are helping both customers and brokers understand emerging trends, Westpac has dedicated divisions of bankers with both the expertise and insight in emerging industries. To this point our Westpac Commercial Introducer value proposition underpins third party market relevancy to these new clients by connecting them to the very best of Westpac and helping them through their journey, especially in these key times of major innovation and transformation in Australian business.
Liberty Financial
There are a number of effective ways brokers can find new commercial clients. The first step is to build up a database of reliable referral partners. Commercial real estate agents, property managers, valuers, accountants and financial planners are a good place to start. However, the more important thing for any broker to consider is how they make themselves stand out to those referral partners.
The market is highly competitive, so being able to facilitate not only traditional commercial loans but also self-servicing lease loans, commercial SMSF loans, and assetlends that don’t require traditional income verification will be an attractive proposition for a referral partner.
Suncorp
The best place to start is in their own established client base. We know that 30% of Suncorp’s customers are self-employed, so it’s a fair assumption to make that most of our brokers’ clients have similar splits.
We would urge brokers to start investigating their existing customer base and find out more about their commercial needs, as opposed to just focusing on their home loan.
ANZ
We all know that approximately 25–30% of a broker’s current mortgage business is for selfemployed applicants. These customers are already known to the broker, and the broker already holds a fair amount of information about them.
The broker has two options:
Thinktank
We encourage the workshopping of commercial deals with a relationship manager to ensure we have a full understanding of the transaction at the time of submission. This helps provide a solid starting point and increases the likelihood of the credit assessment progressing smoothly and quickly. All lenders are the same and tend to dislike undisclosed credit issues and other negative surprises which could have been identified and addressed in the workshop phase. Making the effort to walk through the entire transaction is often going to save the broker, the customer and the lender a lot of time and possible frustration.
La Trobe Financial
From our perspective, there is very little improvement required from brokers to deal with us for commercial transactions, as our commercial loan processes mirror those of our residential loans, meaning it is business as usual for brokers looking to write commercial with La Trobe Financial.
The one difference with commercial that brokers should bear in mind is that it is a slightly longer process, often dictated by the time taken to obtain a valuation report, which can take five to 10 business days, whereas residential valuations generally take two to three business days. So whilst we are known for our ability to complete settlements in quick time, we would caution brokers to set expectations slightly wider for commercial, albeit our turnaround times are still consistently very fast.
Westpac
Commercial brokers can always continue to grow their business by ensuring their fundamental services and support are streamlined, and having a thorough understanding of their lender partners’ processes, particularly at the deal submission stage. This means having all the correct information up front and lodged in one pack so there are no delays for the client.
Another key aspect around continuous improvement is the ongoing education investment in a broker’s personal and professional development, moreover in the key areas of business banking (commercial and SME).
Liberty Financial
Brokers know that every deal is different, which is why it’s important they work closely with the applicant to understand their goals. This is crucial if brokers want to get the fastest and best possible result.
Because Liberty is a free-thinking lender, often we can tailor a solution to meet the client’s unique needs – but to do that we need to understand their full story.
Also, packaging a loan with all the necessary attachments and documentation will ensure very speedy turnaround times. Most application delays occur because they’re sent without the necessary documentation.
Suncorp
At Suncorp, we find that our biggest challenge is ensuring the broker has provided all of the supporting information and documentation required to process the loan, and in particular, full disclosure and understanding of the entities included in the transaction.
Our team of qualified and dedicated SME business development managers are available to educate and support our brokers to build their knowledge through individual transactions. The other service that Suncorp provides, which we have had great feedback on, is that we have a senior credit assessor who will call each broker within four hours of a transaction being submitted.
ANZ
Customer needs analysis. Most customers understand their businesses really well, and our role (broker and banker) is to ensure we are providing solutions that meet customers’ needs. A good understanding of financial statements is also a really important skill that can be easily learned. There are many courses on the market that a broker can enrol into.
Thinktank
We continue to offer various training and orientation programs, often in conjunction with aggregators. These courses span Commercial Lending 101, SMSF-LRBAs, Cash Flow Lending, Construction Finance and Commercial Prospecting. While Thinktank is not active in the cash flow or construction finance market, we believe it is still vitally important to provide an allencompassing understanding of commercial lending to brokers wanting to succeed in this space. We also offer a commercial strategy session as part of our Jigsaw Program, where we will assist brokers one-on-one in putting together tailored marketing initiatives that best fit the range of opportunities in the commercial finance market.
La Trobe Financial
La Trobe Financial caters really well for new entrants to the commercial space as our products are designed to look and feel like standard residential transactions. We use the same application form, serviceability calculator, income verification methods and loan documents, and it’s all done under the same accreditation – no additional training/certification required.
Also, our experienced commercial credit analysts and sales team are keen to help brokers unfamiliar with commercial lending ‘on the fly’, adopting an educative approach so as to support brokers in writing a commercial transaction with us.
We are delighted when we can make a difference to brokers by assisting them with their first commercial loan applications.
Liberty Financial
We help support our brokers in a number of different ways. We often hear that brokers avoid commercial lending because it’s more complex, so we’ve brought on more BDMs who can assist them from start to finish. We guide all our brokers, showing them how to package the loan up, and also work with them right through to settlement.
To help brokers better understand our products and services we’re also continuing to invest in our aggregator partners and to sponsor their commercial business initiatives.
This means Liberty will be present at their PD days across the country so brokers can talk face-to-face with a BDM.
Suncorp
We have been successfully running small business lending masterclasses over the past 18 months, with more than 1,200 brokers having attended these sessions. The masterclasses help to educate brokers on the SME market, as well as on reading financials and making submissions, and give tips on how to start a commercial lending conversation with their current customer base. At a local level, Suncorp also delivers our Business Essentials program, which builds on our brokers’ skills and knowledge of Suncorp’s products and processes, as well as providing more information on our credit appetite and submission requirements.
ANZ
As I mentioned before – calls. We have delivered a commercial mentoring training session for four years, which is supported by the MFAA with CPD points. It is pleasing to see how many mortgage brokers have transitioned to full commercial broker status over the last four years as a result of this training session and are now writing considerable commercial volumes.
Westpac
Westpac is committed to ensuring our broker partners are fully informed about our commercial and SME processes, service and systems. This is in conjunction with having access to the best partnership managers in the industry and more highly capable expert industry bankers.
Over the past 12 months, Westpac has enhanced its support services by refreshing its third party introducer website with new tools and resources, as well as holding more virtual masterclass webinars and prerecorded business help videos. On the ground, investing in our people by providing additional training to our team of partnership managers is a top priority, and Westpac is continually committed to assisting brokers throughout the lending process and helping them grow their business.
Thinktank
It appears that the regulator is not happy with the quality and consistency of reporting they are receiving from the banks over the expanse of their commercial property exposures, which is making it difficult to produce a reliable analysis of the true risk profile for any given institution and the industry in aggregate. Just as APRA and the RBA have been working to improve the data across the universe of residential lending, the heat of the spotlight is now turning on commercial, where the diversity and complexity of finance facilities provided to small business all the way up to corporate and institutional borrowers produces a challenge of a different magnitude.
Weighing on APRA here is the knowledge that last time there was a major property downturn the most significant losses incurred by banks were in the large-ticket commercial property sector where values in some instances fell by up to 30%. We imagine they will be demanding much better, standardised reporting from banks in an attempt to understand and manage emerging risks more effectively, and therefore enabling better macroprudential oversight that ultimately serves to avoid the same sort of excesses as those that occurred in the past.
Liberty Financial
APRA monitors the market to ensure our financial system is robust, and commercial lending is obviously part of our financial system. APRA has identified that commercial property is more susceptible to an economic downturn, so it wants to ensure lenders take this into consideration in their approach.
Suncorp
While residential lending continues to be tightly monitored, with limits put in place on investor and interest-only lending, there is also concern that in a downturn it is likely that the commercial property segment will cause the greatest systemic damage to the economy.
APRA is ensuring banks remain prudent and are prepared for changing property cycles, and have strong balance sheets and resiliency to withstand this.
Opportunities abound in the commercial lending sector, and more brokers appear to be taking note as the number of those writing commercial loans continues to rise.
According to the latest MFAA Industry Intelligence Service report, approximately 2,400 residential mortgage brokers settled $8.2bn of new commercial loans in the six months from April to September 2016, adding to a total commercial loan book of just over $27bn.
However, APRA hinted earlier this year that it may turn its attention to the commercial loan sector, as it has concerns around the quality of lending standards deteriorating in an increasingly competitive environment.
“Given the more heterogeneous nature of commercial property lending, it is more difficult to implement the sorts of benchmarks that we have applied to residential lending. But that should not be read to imply we have any less interest in the quality of commercial property lending,” chairman Wayne Byres said at an event in March.
We asked six different lenders (three nonbanks, two major banks and a non-major) how commercial has changed in the past year; where are the best places for brokers to find clients; and what they would like to see brokers improve on. In turn, they described how they are supporting brokers dealing with commercial clients, and gave us their thoughts on APRA increasing its focus on the commercial space.
Q: What have been the biggest changes in commercial lending over the past year?
ThinktankApart from the significant and well-covered contraction in supply from the banks with respect to development and construction finance, there has been a noticeable adjustment in appetite from the majors who have seemingly become much more selective in terms of everyday commercial property lending. This has created a great opportunity for the nonbanks, who have been able to step into the gap with consistency of product offerings and better service propositions than the banks.
We have also been observing a steady increase in activity over the past year or so from brokers who are relatively new to commercial.
La Trobe Financial
The biggest development we have seen over the past 12 months is the increased number of opportunities presenting themselves for both us and finance brokers generally.
The combination of low interest rates, steady yields that outperform residential assets, and interest from overseas investors, combined with tightening credit conditions from the major banks, has meant that more and more borrowers are turning to finance brokers to seek alternative options, which often land in the hands of a specialist such as ourselves.
Looking at some of the key trends in the commercial property market, we have seen an uplift in the number of SMSFs acquiring commercial property … and we have also witnessed solid interest in both the office and light industrial property markets.
Westpac
The biggest trend we have seen … is an exciting change in the rise of new emerging businesses, particularly in the start-up space.
Many of these new businesses are growing new collective partnerships with like-minded business partners, moreover in areas focused on healthcare, fintech and the service industries.
Liberty Financial
What’s worked so well for commercial lending in the last 12 months is that it’s seen little change. While other segments of the market, like residential, have gone through considerable change, the commercial sector has maintained steady growth. Liberty has also experienced strong growth, and in particular we’ve seen more brokers realise the benefits of our commercial SMSF and LeaseStream products.
While we expect APRA’s heightened regulatory scrutiny of the sector to have an impact on some lenders in the future, Liberty has always focused on building a stable and responsible portfolio that can withstand changing market and regulatory impacts.
Suncorp
With more and more lenders entering this space over the past 12 months, it’s a great sign of the support the industry has for this channel. At Suncorp we have undertaken a national broker training campaign with our masterclass workshops, to share our knowledge and upskill our broker partners looking to diversify and get into commercial lending. Positive changes around simplifying the submission and approval process have been a big change in this space, which has enabled residential brokers to diversify and confidently offer commercial products to their clients.
ANZ
All the banks have been asked to maintain exposures to the property development and investment segments below a certain regulatory cap. At ANZ we continue to support our existing customers, who are well known to ANZ, with their property projects allowing our business development activities to focus on acquiring new trading businesses.
We have invested in our relationship managers and provided them with some additional training around banking trading businesses, which will help them have a much richer needs-based conversation with our brokers and their customers. It also means we can provide customers with some greater insight into the cash conversion cycle of the business and ultimately get a quicker decision.
Q: Where should brokers look for commercial clients?
ThinktankA broker’s existing customer database is often the easiest and best place to start. By focusing on those clients they already have a strong relationship with, arranging to call in and conduct a quick financial health check is a great way to identify whether there may be existing or future commercial financing needs. Taking the time to review personal and business asset and liability positions, enquire about leasing versus owning and longer-term wealth management plans that might also include a discussion around self-managed superannuation fund options, can lead things in the right direction.
La Trobe Financial
Brokers should review their CRM to identify clients who already hold commercial property and see if there is an opportunity to refinance it for them, particularly if they have held the property for some time. The next step would be to look for self-employed clients and approach them to see if they are interested in purchasing premises to conduct their businesses from, possibly even in an SMSF structure.
Brokers could also target local small businesses by running seminars … not only could this initiative drive specific commercial loan origination, but it could help raise the broker’s profile in their local community.
Westpac
To ensure we are helping both customers and brokers understand emerging trends, Westpac has dedicated divisions of bankers with both the expertise and insight in emerging industries. To this point our Westpac Commercial Introducer value proposition underpins third party market relevancy to these new clients by connecting them to the very best of Westpac and helping them through their journey, especially in these key times of major innovation and transformation in Australian business.
Liberty Financial
There are a number of effective ways brokers can find new commercial clients. The first step is to build up a database of reliable referral partners. Commercial real estate agents, property managers, valuers, accountants and financial planners are a good place to start. However, the more important thing for any broker to consider is how they make themselves stand out to those referral partners.
The market is highly competitive, so being able to facilitate not only traditional commercial loans but also self-servicing lease loans, commercial SMSF loans, and assetlends that don’t require traditional income verification will be an attractive proposition for a referral partner.
Suncorp
The best place to start is in their own established client base. We know that 30% of Suncorp’s customers are self-employed, so it’s a fair assumption to make that most of our brokers’ clients have similar splits.
We would urge brokers to start investigating their existing customer base and find out more about their commercial needs, as opposed to just focusing on their home loan.
ANZ
We all know that approximately 25–30% of a broker’s current mortgage business is for selfemployed applicants. These customers are already known to the broker, and the broker already holds a fair amount of information about them.
The broker has two options:
- If they have a commercial accreditation, write up the deal and get it in to us. The dual app process is awesome.
- Give us the customer details and we’ll do all the work for them and they can earn a referral payment.
Q: From a lender perspective, what can brokers improve on?
ThinktankWe encourage the workshopping of commercial deals with a relationship manager to ensure we have a full understanding of the transaction at the time of submission. This helps provide a solid starting point and increases the likelihood of the credit assessment progressing smoothly and quickly. All lenders are the same and tend to dislike undisclosed credit issues and other negative surprises which could have been identified and addressed in the workshop phase. Making the effort to walk through the entire transaction is often going to save the broker, the customer and the lender a lot of time and possible frustration.
La Trobe Financial
From our perspective, there is very little improvement required from brokers to deal with us for commercial transactions, as our commercial loan processes mirror those of our residential loans, meaning it is business as usual for brokers looking to write commercial with La Trobe Financial.
The one difference with commercial that brokers should bear in mind is that it is a slightly longer process, often dictated by the time taken to obtain a valuation report, which can take five to 10 business days, whereas residential valuations generally take two to three business days. So whilst we are known for our ability to complete settlements in quick time, we would caution brokers to set expectations slightly wider for commercial, albeit our turnaround times are still consistently very fast.
Westpac
Commercial brokers can always continue to grow their business by ensuring their fundamental services and support are streamlined, and having a thorough understanding of their lender partners’ processes, particularly at the deal submission stage. This means having all the correct information up front and lodged in one pack so there are no delays for the client.
Another key aspect around continuous improvement is the ongoing education investment in a broker’s personal and professional development, moreover in the key areas of business banking (commercial and SME).
Liberty Financial
Brokers know that every deal is different, which is why it’s important they work closely with the applicant to understand their goals. This is crucial if brokers want to get the fastest and best possible result.
Because Liberty is a free-thinking lender, often we can tailor a solution to meet the client’s unique needs – but to do that we need to understand their full story.
Also, packaging a loan with all the necessary attachments and documentation will ensure very speedy turnaround times. Most application delays occur because they’re sent without the necessary documentation.
Suncorp
At Suncorp, we find that our biggest challenge is ensuring the broker has provided all of the supporting information and documentation required to process the loan, and in particular, full disclosure and understanding of the entities included in the transaction.
Our team of qualified and dedicated SME business development managers are available to educate and support our brokers to build their knowledge through individual transactions. The other service that Suncorp provides, which we have had great feedback on, is that we have a senior credit assessor who will call each broker within four hours of a transaction being submitted.
ANZ
Customer needs analysis. Most customers understand their businesses really well, and our role (broker and banker) is to ensure we are providing solutions that meet customers’ needs. A good understanding of financial statements is also a really important skill that can be easily learned. There are many courses on the market that a broker can enrol into.
Q: What resources and support do you offer new-to-commercial brokers?
ThinktankWe continue to offer various training and orientation programs, often in conjunction with aggregators. These courses span Commercial Lending 101, SMSF-LRBAs, Cash Flow Lending, Construction Finance and Commercial Prospecting. While Thinktank is not active in the cash flow or construction finance market, we believe it is still vitally important to provide an allencompassing understanding of commercial lending to brokers wanting to succeed in this space. We also offer a commercial strategy session as part of our Jigsaw Program, where we will assist brokers one-on-one in putting together tailored marketing initiatives that best fit the range of opportunities in the commercial finance market.
La Trobe Financial
La Trobe Financial caters really well for new entrants to the commercial space as our products are designed to look and feel like standard residential transactions. We use the same application form, serviceability calculator, income verification methods and loan documents, and it’s all done under the same accreditation – no additional training/certification required.
Also, our experienced commercial credit analysts and sales team are keen to help brokers unfamiliar with commercial lending ‘on the fly’, adopting an educative approach so as to support brokers in writing a commercial transaction with us.
We are delighted when we can make a difference to brokers by assisting them with their first commercial loan applications.
Liberty Financial
We help support our brokers in a number of different ways. We often hear that brokers avoid commercial lending because it’s more complex, so we’ve brought on more BDMs who can assist them from start to finish. We guide all our brokers, showing them how to package the loan up, and also work with them right through to settlement.
To help brokers better understand our products and services we’re also continuing to invest in our aggregator partners and to sponsor their commercial business initiatives.
This means Liberty will be present at their PD days across the country so brokers can talk face-to-face with a BDM.
Suncorp
We have been successfully running small business lending masterclasses over the past 18 months, with more than 1,200 brokers having attended these sessions. The masterclasses help to educate brokers on the SME market, as well as on reading financials and making submissions, and give tips on how to start a commercial lending conversation with their current customer base. At a local level, Suncorp also delivers our Business Essentials program, which builds on our brokers’ skills and knowledge of Suncorp’s products and processes, as well as providing more information on our credit appetite and submission requirements.
ANZ
As I mentioned before – calls. We have delivered a commercial mentoring training session for four years, which is supported by the MFAA with CPD points. It is pleasing to see how many mortgage brokers have transitioned to full commercial broker status over the last four years as a result of this training session and are now writing considerable commercial volumes.
Westpac
Westpac is committed to ensuring our broker partners are fully informed about our commercial and SME processes, service and systems. This is in conjunction with having access to the best partnership managers in the industry and more highly capable expert industry bankers.
Over the past 12 months, Westpac has enhanced its support services by refreshing its third party introducer website with new tools and resources, as well as holding more virtual masterclass webinars and prerecorded business help videos. On the ground, investing in our people by providing additional training to our team of partnership managers is a top priority, and Westpac is continually committed to assisting brokers throughout the lending process and helping them grow their business.
Q: Why is APRA investigating commercial lending?
ThinktankIt appears that the regulator is not happy with the quality and consistency of reporting they are receiving from the banks over the expanse of their commercial property exposures, which is making it difficult to produce a reliable analysis of the true risk profile for any given institution and the industry in aggregate. Just as APRA and the RBA have been working to improve the data across the universe of residential lending, the heat of the spotlight is now turning on commercial, where the diversity and complexity of finance facilities provided to small business all the way up to corporate and institutional borrowers produces a challenge of a different magnitude.
Weighing on APRA here is the knowledge that last time there was a major property downturn the most significant losses incurred by banks were in the large-ticket commercial property sector where values in some instances fell by up to 30%. We imagine they will be demanding much better, standardised reporting from banks in an attempt to understand and manage emerging risks more effectively, and therefore enabling better macroprudential oversight that ultimately serves to avoid the same sort of excesses as those that occurred in the past.
Liberty Financial
APRA monitors the market to ensure our financial system is robust, and commercial lending is obviously part of our financial system. APRA has identified that commercial property is more susceptible to an economic downturn, so it wants to ensure lenders take this into consideration in their approach.
Suncorp
While residential lending continues to be tightly monitored, with limits put in place on investor and interest-only lending, there is also concern that in a downturn it is likely that the commercial property segment will cause the greatest systemic damage to the economy.
APRA is ensuring banks remain prudent and are prepared for changing property cycles, and have strong balance sheets and resiliency to withstand this.
