Hi all
So the recent bank equity raisings caught me off guard but now it's all starting to make sense (I haven't been watching closely)...
http://www.abc.net.au/news/2015-05-18/investor-home-loans-tighten-as-regulator-clamps-down/6477134
That's a laundry list of strategies we all use to increase access to credit - for banks to take away from us. Interest rate deductions for investors, interest only, reduced buffers on external or internal debt - you name it and APRA appears to be going for it.
So it looks like APRA is getting serious about getting investor lending down around 30% again. From a public policy perspective, it's all probably a good idea - it's going to take the heat out of house prices in many over heated areas that has been caused by investors and increase the resilience of the financial system to future shocks.
Doesn't bode well for capital growth though - clamping down on the only source of lending that has been growing in recent years. If this actually get deployed as mooted here it's my bet that the Australian real estate market will have to get used to the sound of crickets chirping for an extended period...
So the recent bank equity raisings caught me off guard but now it's all starting to make sense (I haven't been watching closely)...
http://www.abc.net.au/news/2015-05-18/investor-home-loans-tighten-as-regulator-clamps-down/6477134
That's a laundry list of strategies we all use to increase access to credit - for banks to take away from us. Interest rate deductions for investors, interest only, reduced buffers on external or internal debt - you name it and APRA appears to be going for it.
So it looks like APRA is getting serious about getting investor lending down around 30% again. From a public policy perspective, it's all probably a good idea - it's going to take the heat out of house prices in many over heated areas that has been caused by investors and increase the resilience of the financial system to future shocks.
Doesn't bode well for capital growth though - clamping down on the only source of lending that has been growing in recent years. If this actually get deployed as mooted here it's my bet that the Australian real estate market will have to get used to the sound of crickets chirping for an extended period...