APRA crack down again slows investor lending

By |
The Australian Prudential Regulation Authority’s (APRA) push to slow down investor lending is showing more signs of having an effect.

Statistics released yesterday by the Reserve Bank of Australia show that lending to investors cooled over August, but growth levels still remain above the 10% annual cap mandated by the regulator.

According to the RBA figures, investor lending grew by 10.7% in the year to August , down from 10.8% in July.

While still above the APRA limit, growth levels have dropped for two straight months following the 11.1% peak reached in June, having increased every month since December 2011.

Though the overall growth of investor lending is slowing, there are still signs some lenders are struggling to meet their requirments, with HSBC becoming the second lender to take major steps in restricting its investor lending with the bank now only offering investment loans to existing customers.

Earlier this year AMP announced it has withdrawn from the investor loan market for the time being.

"We have put a number of measures in place to address the needs of our customers and adhere to our regulatory responsibilities," HSBC's Australian head of retail banking and wealth management Graham Heunis said.

"These mechanisms include limiting investor home loans to existing customers only, as well as providing owner occupier customers with a highly competitive variable rate."

The August figures back up a prediction made by CoreLogic RP Data analyst Cameron Kusher, who last month said the peak of lending to investors had likely passed.

“Although it’s only one month of data, the latest housing credit data to July 2015 suggests that we may be finally set to see a slowing of investment credit growth,” Kusher said in September.

Kusher also said he believes investor lending growth will fall to APRA’s mandated 10%, but it is unlikely to go much lower than that.

“Investment segment lending data on the investment segment suggests that following recent changes to lending policies by Australian ADIs, lending to the investment segment of the market is set to slow further over the coming months,” he said.

“With mortgage rates remaining low we would anticipate the rate of growth will slow to around the 10% per annum benchmark, however this is unlikely to drop much further than that.”

With interest rates at their lowest for more than 50 years, there are some great rates available. The best thing to do is to compare rates from all the lenders. Let us help take the leg work out of doing this - Compare Home Loans now

Top Suburbs : bligh park , spearwood , sunshine , st marys , sth toowoomba

go back

Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here