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Franchise CEO has message for banks in wake of investor crackdown

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Australian Broker | 31 Jul 2015, 08:10 AM Agree 0
The chief executive of a major mortgage franchise has a message for lenders before they take such a blunt approach and increase interest rates on investment lending
  • Brissie Broker | 31 Jul 2015, 08:52 AM Agree 0
    Here Here Mr Flavell in the famous words of an ex-politician & unusual dancer..... the rich get richer & poor get the picture... those with lots of equity will be the only ones delving into the investment property market.
  • Sophie | 31 Jul 2015, 09:02 AM Agree 0
    Joint effort by the banks to show APRA who's boss?
  • Wa broker | 31 Jul 2015, 09:03 AM Agree 0
    I agree with John's sentiments. But maybe could the increase in pricing be part of the bigger picture with banks requiring greater capital reserves and liquidity?
  • syd broker | 31 Jul 2015, 09:03 AM Agree 0
    Agree totally John however is it the lenders or APRA being heavy handed with threats of shutting them down if they don't take immediate action to curb "investment" lending? Discuss.
  • GC | 31 Jul 2015, 09:16 AM Agree 0
    Is the government going to advise which investment vehicle they would like us to invest in? They constantly screw around with Superannuation making it a a pathetic investment and now they are trying to completely wreck property investment and a decent investment vehicle. Then they bitch about the cost of supporting people in retirement. As far as I am concerned the government have absolutely no right to tell us what we can invest in or interfere and try to control it in any way.
    This absurd notion that investment lending is risky needs to be addressed. It is no more risky than domestic lending and in fact I feel its less risky as there are multiple revenue streams helping to pay the mortgage.
    The biggest issue of all of this is that First Home Owners will now find it harder to buy a property to call home due to rental increases.
    Its about time the idiot decision makers in the government started to actually listen to the people in the industry and look at segregating the problems instead of thinking its a problem that affects the country as a whole.
  • Steve McClure | 31 Jul 2015, 09:19 AM Agree 0
    It is really disappointing that there has been no defined strategy, consultation and direction of the measures with brokers. Announcements "as at now" are made, with deep ramifications for clients. Are we not business partners? If so, is that how you do business?
  • Soula Chatswood | 31 Jul 2015, 09:23 AM Agree 0
    Couldn't agree more!!! Asset rich will not be affected only the younger buyers desperate to get in the property market (with investment properties) while still living at home because they can't afford to leave home. Come on the industry needs to speak up to support FHB !!!!!
  • John | 31 Jul 2015, 10:15 AM Agree 0
    They talk about petrol collusion? Is this Banking collusion?
    Christmas has come early, thank you Mr APRA.
  • Broker | 31 Jul 2015, 10:36 AM Agree 0
    All well and good John, BUT I would bet my last dollar that if you were still with NAB, you would have ticked off their recent changes to policy!!
  • Bottom Line.... | 31 Jul 2015, 10:47 AM Agree 0
    Spot on John Flavell.
    Shows how rational thought usually comes from people in the trenches; not theorists in ivory towers.
  • Paul | 31 Jul 2015, 11:22 AM Agree 0
    The regulators are the one to blame for this blunt approach. Why is it possible in NZ for LVR's and lending criteria to be amended for investment purchases in the AKL region only rather than a nationwide restriction be put in place. The end result of the changes in Aust will be the exclusion of those who would benefit from undertaking investment and the dampening of activity in markets outside Syd and Melbourne that could well do with more activity.Once again the regulators have proven themselves to be out of their depth when considering policy.
  • Regional Broker | 31 Jul 2015, 11:24 AM Agree 0
    Great Comments from Mr Flavell , he would have insight as he is an ex NAB senior executive !! The interesting reason as to why Westpac have not joined the programme is because their system cannot cope , bet they are working in that right now
  • FC | 31 Jul 2015, 12:46 PM Agree 0
    I still believe the lever they should have adjusted is the LVR. If you want lower risk lending into the investment property market, reduce the LVR to 70%.

    Increasing interest rates hurts the economy, by reducing disposable income. Will push up rents in hot spots and will need to be absorbed by landlords in the less popular areas. Both actually increase the risk of default.

    Lower the LVR, more equity, possibly provides positive cashflow & does not put pressure on rents. Still reduces investment lending by requiring more cash from the buyer, but deals that are completed are at lower risk.

    APRA appear to have provided the opportunity to improve bank margins.
  • SEQ Broker | 11 Aug 2015, 09:20 AM Agree 0
    yes, we will call this the Midnight Oil Procedure. How to give the big 4 bunches more money in their coffers..again.. and still not hit the people you need to hit, but instead target those not wealthy, just trying to get ahead.
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