Specialist commercial lender Private Mortgages Australia has announced that it has raised its maximum LVR to 80%.
The decision comes after the private lender partnered with Property Predictions Pty Ltd, the creator of patented methodologies that measure demand trends and predict expected changes in prices across the Australian property market.
“Having access to these Traffic Light Reports from Property Predictions gives us confidence to offer a higher LVR to borrowers who are looking to secure finance against properties in those suburbs,” said Tony Barbone, Managing Director of Private Mortgages Australia.
“Most private lenders will generally only lend 65% to 70% LVR, and a lot of the time this is based on a forced-sale valuation rather than the true value of the security property. We always take the true value of the security property without any tricks in order to give our borrowers a better solution.”
The Traffic Light Reports from Property Predictions leverage predictive and patented algorithms developed by leading property market analyst, John Lindeman to provide highly accurate short term rent and price change predictions for houses and units in any suburb in Australia.
"The predictive software is employed in a database, which analyses potential buyer, seller, renter and investor demand trends for houses and units in every suburb in Australia,” said property market analyst, John Lindeman, who developed the forecasting methodology in 2011.
“The database predicts short-run potential price changes, expressing current and predicted types of markets as either ‘stressed, buyer, neutral, seller or boom’. Since 2011, over 90% of suburbs analysed have moved in the direction forecast at the time.”
Having access to this level of rich, robust data is giving lenders more confidence when making decisions to do with loan approvals, which Lindeman said was “definitely a sign of things to come in the lending arena”.
“This approach looks forwards to potential changes using an analytical, data-driven approach to risk management, rather than backwards to past price performance or default rates,” he said.
“The predictive software we use is giving PMA the confidence to back the borrower and increase the maximum LVR to 80% in selected suburbs. It creates a win-win situation for both PMA and the borrower.”
