Sydney Property Market Update May 2018
Last Year APRA the banking industry’s governing body placed restrictions on investment lending and enforced a cap of 10% on all lenders loan books. The banks and other lenders took this mandate seriously and kept investment loans at 10% of their total loan portfolio’s. How did they do this? Well of course they were able to tighten up policy on who they would lend to and they raised rates to make it unaffordable for a section of potential new investors. In typical bank fashion they also raised rates for existing investment loan customers so they manage to profit from whatever changes take place.
This 10% cap has now been lifted by APRA which is really interesting from this Brokers perspective because the industry and the public had only just seemed to get into the groove with all the tightened policy and higher rates.
What does this mean for investors moving forward?
It’s hard to imagine the bigger banks lowering rates just yet and with the microscope on them due to the current Banking Royal Commission happening they won’t relax any lending policy either. It’s a bit of a watch this space scenario but I believe that it’s good news for people considering property investment. One of the smaller lenders will see this as an opportunity to provide a niche offering to gain some market share and that’s the lender I’ll be recommending to clients.
For more information on this latest market development you can read this article in Sydney’s Financial Review…