More calls for APRA to take a different approach to slow down investor lending

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More calls have been made for the Australian Prudential Regulation Authority (APRA) to change how it regulates the country’s lending market.

Banks across the country have raised interest rates on investor loans over recent weeks in response to APRA’s push to slow down investor lending, but the decision to hit not only new, but existing customers with an interest rate increase has drawn the ire of The Property Investment Professionals of Australia (PIPA).

"Increasing borrowing costs for investors, and in some cases owner occupiers, who bought into the market some time ago seems unfair and detracts from what should be the common goal of creating a balanced property market," PIPA chair Ben Kingsley said.

Kingsley said PIPA supports APRA’s efforts to regulate the market, but he believes the watchdog would be better served by taking a more holistic approach to the situation.

“While PIPA fully supports responsible lending, we believe going forward APRA should take a more transparent approach, rather than continue its current closed door tactics."     

“PIPA is urging the government and regulators to join forces and open this debate to the broader industry,” he said.

“Let us all contribute to this discussion and invest in measures that will create a more balanced property market for the long-term, and strengthen this invaluable component of our economy.”

Kinglsey believes APRA should take a more targeted approach and focus on lending restrictions for buyers in particular areas where the market may be overheated.

Those ideas are similar to those put forward by Joe Sirianni, director of broking firm Smartline, who believes APRA currently has the capability to target specific areas.

“When you look at Australia the Sydney metro and Melbourne metro markets are probably overheated, but is that the same in Wollongong or Newcastle or other markets?” he said.

“No matter if it is or isn’t, buyers in those markets and those markets themselves have been hit as a result of APRA’s changes, which is why I’d like to see APRA and the banks use the more sophisticated data we have now to target the areas that are overheated.”


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