My initial thoughts are if it slows down the rate at which investors can buy , further down the line , it will slow down new buildings , potentially raise rents and make it easier for the RBA to drop interest rates further .
The sum would be to increase returns on those with existing IP's and as cash flow improves , those who can borrow will buy more IP's as the returns have improved ... And prices go up again. .....
So does that put us back where we started ???
Cliff
Mate, the rental prices has alot of catching up to do before it'll allow the average investor to be in a position to borrow again to invest in another IP.
Plus, rental income used for servicing isn't as attractive as it would be due to the changes made to the servicing calculators.