Interesting article, thanks for posting - i think his partly right as to possible next steps.Just now, I've been confirmed by my Mortgage Broker, that Bankwest is not accepting LVR greater than 80%
So I guess for my next investment journey, it is going to be very hard to look for vendor which still allows 88% LVR.
Especially after reading this article: http://www.mortgagebusiness.com.au/breaking-news/8587-apra-to-turn-screws-on-lending-market
IMF are in town this week/month i believe and will report within a few months, i strongly suspect they'll come out with a pretty headline worthy report stating that we're in bubble territory in Sydney and action is required. Their quite strong macro-prudential intervention and tightening to serviceability calculators is a small step compared to hard LVR caps. Given this is well and truly in their mandate/expertise, its likely to send a strong message out.
APRAs next move, if required, is more direct intervention (LVR caps). If this doesn't cool than expect APRA to make changes here.
Nonetheless, it's stupid to say that this round of changes hasn't worked. Its barely been in existence and has a lag time to take an effect on prices/market.
They'll give it some time, obtain the next round of lending data from individual lenders, do their consultations (talk to all the banks), and then act if necessary. If Sydney keeps running they'll be forced to act and by the looks of this round of changes, they don't favour geographic based policy.
I posted about APRA's possible gameplan (at least my knowledge/expectations of it) in January. The only surprising part of it to me is the speed of all these changes. They've gone so strong to start with (I thought it'd be smaller steps to start, then these current changes and then direct intervention). Also his statement about the serviceability changes is that Byres made it sound permanent improvements to our prudential framework, NOT temporary (the pricing part is temporary).
In saying that, banks always find ways to innovate. Their strongly incentivised to. I'm sure in a downmarket where credit growth sits <5% APRA won't be as worried with people trying to leverage up. Banks (first and second tiers under APRA's purview) may find innovative ways to circle this.