Lender restrictions causing concern for investors

Adam Smith 30 May 2016

house questionLender policy changes are seeing property investors shelve their plans, a new survey has found.

Mortgage Choice’s annual Investor Survey has found 33% of respondents had been forced to alter their investment plans as a result of policy and pricing changes made by lenders. For those who decided to go ahead with their investment plans in spite of the changes, 32% of respondents who had purchased an investment property in the last year described the process of obtaining finance as “difficult”.

Mortgage Choice chief executive John Flavell said the company’s findings were supported by data from the Australian Bureau of Statistics, which found the value of investment loans has fallen approximately 10% from December 2014 when the Australian Prudential Regulation Authority (APRA) urged lenders to cap investment lending growth at 10%.

“Over the last 16 months, most of Australia’s lenders have been forced to tweak their policy and pricing in order to stem their level of investment lending growth,” Flavell said. “These changes have ranged from the removal of discretionary pricing on investment lending all the way through to loan to valuation restrictions.”

In spite of the challenges, Flavell argued that property remained an attractive asset class for investors. He pointed to CoreLogic figures showing property value growth of 7.3% for the 12 months to May.

How to invest in the wake of APRA's restrictions

More help from finder.com.au

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question