Great News For Investors

APRA SCRAPS PROPERTY INVESTOR LENDING RESTRICTIONS
Apr 27, 2018

The Australian Prudential Regulation Authority (APRA) chairman Wayne Byres has announced that it will remove a major restriction on investment lending. The 10 percent limit on the bank investment lending portfolio will be scrapped which was established in 2014.

The limit of investor lending growth to no more than 10 percent was imposed in 2014 in order to cool the Sydney and Melbourne housing markets.

The investor lending restriction preceded a cap on interest-only lending, with the two measures aimed at strengthening major bank balance sheets and restricting the flow of speculative money into the property market.

This measure caused banks to increase investor interest rate and demanding a bigger deposit. Due to those regulations, investment lending across the country has taken a major step backward which improved the competitiveness of first home buyer market.

What does it mean for you? The winners will be property investors, who could benefit from a lowering of interest rates on investment loans. More than 20 lenders had already cut their investment interest rate for principle and interest payment in 2018. For first home buyer, there will be an increase in demand for properties which will drive up the price.

Source: news.com.au and domain.com.au

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