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Major bank announces changes to lending policies

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Julia Corderoy | 02 Jun 2015, 08:39 AM Agree 0
Major bank announces changes to home lending policies, in the wake of APRA's crackdown
  • Dan - Melbourne | 02 Jun 2015, 08:57 AM Agree 0
    Well.....they were competitive :(
  • Broker | 02 Jun 2015, 10:52 AM Agree 0
    Don't you just love the lenders responses to APRA, tweak here and there and then just increase the interest rates, that should do it!!
  • Greg Reid | 02 Jun 2015, 11:23 AM Agree 0
    I worry about where the Australian economy is heading in the next decade and beyond with the mis-match of federal government policy and regulatory change by various government bodies. The left hand does not know what the right hand is doing, or more likely, does not care.
    Has anyone asked:
    Why is investor activity in residential property increasing?
    Is there a long term benefit if it does?

    The argument that low interest rates are a cause for greater investor activity is patently incorrect. The low interest rate should make greater incentive for new owner-occupiers as the rent vs. buy equation becomes more heavily weighted to owning.

    Perhaps the real reason lies in lack of confidence in the economy and share market volatility.

    With the ageing population, any measure to encourage long term wealth creation should be encouraged, not cracked down on.

    It appears that the Sydney housing market, dormant for nearly a decade since they had their last great spike in early 2000's, has spiked again and more than likely without any intervention will stabilise again for another decade. Instead we have regulators that apply a sledge hammer when they needed not do anything or could have targeted specific measures, lenders could have restricted LVR's to Sydney postcodes for instance, to temper that particular market. Instead they create greater profits to lenders in the form of higher interest rates to investors (remembering some of the rhetoric is investors are higher risk lending - although a recent RBA research papers said the risk of default was similar to owner-occupiers) and in theory will cause greater hardship to investors. How does that make any sense?

    As to some of the lender policy changes, NAB and others are now intending to assess other lenders debt at their assessment rates on a P&I basis, yet they want evidence of the debt - why - if they are going to load it anyway?
    Positive credit reporting should list all debt taken on (if the lenders would ever invest some of their hard earned profits to actually do something about it).
    It seems to me that the non-banks will become far more attractive than the majors in particular.
  • Papery | 02 Jun 2015, 02:36 PM Agree 0
    I agree with @Broker..... all these changes are just 'tweaking'. It'll get real interesting when the LMI providers tighten up.
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