How could restricted borrowing change investing approach

[see_change]

Im not so sure of this just yet Cliff - this would mean most banks start restricting LVRs.

APRAs peripherally mentioned that they have the option to go down this route if necessary, but this sort of intervention appears to be a while away. At this stage it is just tinkering and asking individual banks to move in line with their pre-defined prudent standards. Each bank carries different types of exposure, and overexposure on their books. BW i would assume is carrying a significant portion of high LVR loans and hence have cut back in this space. Other lenders have DSR issues and hence are tightening serviceability calculators.

Not sure that LVR issues are a key risk just yet for the majority of lenders.

Nonetheless, should growth continue to run over the next 12-18 months at an unsustainable pace driven by investor credit demand and loosening standards, then yes, we may see some real hard caps imposed and a big impact on the OTP market.

Cheers,
Redom

Yesterday , i didn't realise that bank west was in a fairly unique position of getting a high proportion of their loans at 95 , so their action represented a rebalancing of their overall portfolio and probably won't be followed by other banks .

Cliff

 

[BayView]

I'm interested to hear what segment of the market you think could be negatively effected the most by the (possible/probable) slowdown in investment lending.

Given that the majority of investors only own one IP, it would probably mean that these folks are not in the higher income group, and would therefore be looking in the below median end of the price ranges.

The more cashed-up, and/or experienced, and/or higher income group will possibly be looking/able to look at the higher end a bit more - subdivs etc.

 

[starter]

Given that the majority of investors only own one IP, it would probably mean that these folks are not in the higher income group, and would therefore be looking in the below median end of the price ranges.

The more cashed-up, and/or experienced, and/or higher income group will be possible looking/able to look at the higher end a bit more - subdivs etc.

I'm not sure that's the case Bayview, on this forum for example there are plenty of experienced investors who like the below median end as their playground. If anything I would say that those investing in just 1 IP would be more likely to go for the perceived "better" property.

 

[BayView]

I'm not sure that's the case Bayview, on this forum for example there are plenty of experienced investors who like the below median end as their playground. If anything I would say that those investing in just 1 IP would be more likely to go for the perceived "better" property.

Yep, I know that.

I did say; the higher income group "will possibly".

Those that are investing in one IP will buy whatever their borrowing power allows.

Given that the overwhelming percentage of the population is not high income earning, then I would hazard a guess that the below median is where they will probably look.

Also; the cashflow at that end is better as a general rule than the higher end "better" properties - which favours the not-so-well-off folks.

Don't use this place as the yard stick.

This place is full of higher-earning financially educated and sophisticated types now...not representative of the majority of investors out there.