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Aussie John worried APRA crackdown will have unintended consequences

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Australian Broker | 29 May 2015, 08:00 AM Agree 0
APRA's crackdown on investor loans could have 'unintended consequences', warns Aussie chairman
  • GC | 29 May 2015, 08:51 AM Agree 0
    I agree with John 100%. Most foreign investors have cash and don't rely on our lenders. The other issue is that higher finance costs will lead to higher rents. Every time the govt. or govt. body fiddles with things they don't understand they screw it up. This is going back to the bad days. The banks know what they are doing - how about APRA and others let them get on with it. They have been highly profitable for over 100 years - without the assistance of any govt. body.
  • Broker | 29 May 2015, 09:15 AM Agree 0
    It has got to the point that I don't ever expect APRA to know what they are doing!
  • JB | 29 May 2015, 09:20 AM Agree 0
    For whatever reason, first home buyers are staying away from property. Rental demand clearly remains strong enough for investors to be interested. Tinkering by APRA & Banks to dissuade investors will lead to higher rents and further price increases in the Sydney market. The Banks should be left alone, the last thing we need is a flagging property market in an otherwise depressed economy.
  • Neil | 29 May 2015, 09:34 AM Agree 0
    Another unintended consequence may be the move of investors to the Big 4. Given they hold the bulk of deposit funds, and also attract a large slice of the owner-occupied loans, the Big 4 may find it substantially easier to offset their investor loan activity. All I see is second tier and non-banks struggling to retain market share. Not a good outcome, as objectivity will be reduced and the borrower will suffer.
  • GC | 29 May 2015, 09:39 AM Agree 0
    I think a major reason for FHO's staying away from the market is simply the entry costs. They struggle to save the deposit and then get hit with massive LMI fees that do nothing but protect the lender. They simply cant get in as they are constantly chasing their tails.
    LMI is basically legal theft and if the protection is for the lender then I think the lender should pay for it. The lender could cover the fee with a rate increase on the loan and fix the loan for a specific period. Unfortunately no Govt. has the guts to take the lenders & LMI suppliers on so its not likely to change in the short term.
    LMI is something that really needs to be tackled. Get rid of these thieving LMI companies and work with the lenders to really find proper solutions - for all borrowers.
  • sigh.... | 29 May 2015, 09:55 AM Agree 0
    What 'Broker' said.
    Another client recently doorknocked by someone representing an overseas buyer. Paying cash well above what a valuation would say. Another APRA bungle - prevent Australians buying investment property, but do nothing about overseas buyers.
  • SEQ Broker | 29 May 2015, 10:01 AM Agree 0
    Hmmm. Perhaps APRA does know what they are doing. I wouldn't be at all surprised if this is yet another push to increase market share of the big 4. We have seen it before, we will see it again. Trouble is, it is always the consumer who pays.
  • AF | 29 May 2015, 10:29 AM Agree 0
    Totally agree that locals are being discriminated against.
  • Will | 29 May 2015, 01:11 PM Agree 0
    The problem is all this Cash that is coming into this country, Is it been declared, I bet you it’s not!! Why can’t the authorities check on a cash offer, were did the cash come from (is it a legal source of income - THE CASH- and has it been put through the correct systems and process getting into this country). IT CRAZY at the moment and John Symonds comments are spot on. No one what's to pick on the Chinese or anyone for that matter, but some balance and checks are needed NOW. IF a Cash Buyer is living overseas or living mainly overseas purchase property here in Australia,
    They will not be no effect on them when the market correct itself but for the average person living and working in Australia it could be devastating not to mention the banks.
  • Larry Walker | 29 May 2015, 01:40 PM Agree 0
    Foreign Investors should be charged 50% stamp duty and 20% selling tax.
  • Laszlo Toth | 29 May 2015, 01:41 PM Agree 0
    That was my first impression when the news came out. We are restricting our own in favour to overseas investors. Another slap in our face from the government.
  • Adrian | 29 May 2015, 10:27 PM Agree 0
    The changes to lending standards are also going to have a bigger effect for the first time mum and dad investors as opposed to those with larger deposits and already strong servicing. The already strong candidates won't feel much pain but just like the first home buyers, it seems a lot harder to start from the ground up. I don't think it small or first time investors really going over the top with spending.
  • E3PI | 01 Jun 2015, 12:39 PM Agree 0
    The APRA moves to date are a very blunt instrument with lots of unintended consequences... such as reducing competition (particularly for small lenders - 10% investor growth at ME vs 10% at CBA is a vast difference) and as the majors already have over 70% of the volume. Govts brought O/OCC demand forward with all the FHB incentives and now complaining too much investment - seriously? Tweak not smash the market pls!
  • Richard | 27 Jul 2015, 03:30 PM Agree 0
    Where does APRA get this 10% magical round number from? What evidence do they have to suggest it is worth pushing the like of AMP to shut it's doors completely to investment lending? We get our research on the property market from BIS Shrapnel. It is conservative and the same provider that QBE LMI use. Yes it is clear the Sydney market is close to the top of its cycle, but no other capital city market is anywhere near as overheated as Sydney, so why make such broad lending changes across the whole market for investment lending? Why is 97% LVR still supported for Sydney owner-occupied lending, but limited to 80% in markets like Brisbane that are widely and sensibly forecasted for sound growth? Is this 10% magical round number really worth the mass redundancies and other effects that are already unfolding? If so, it would be great if APRA could make it far more know what they are so concerned about? Tightening lending for the Sydney market is quite understandable, but such extreme widespread changes are difficult to understand.
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