Property investors’ plans scuttled by lending restrictions
A growing number of investors say their plans are being impacted by changes to lending policies.
The Australian Prudential Regulation Authority’s (APRA) recent 30% cap on new interest-only lending has seen a number of lenders raise the interest rates on interest-only loans and tighten criteria for investors. The annual Investor Survey from Mortgage Choice has found that the changes are dampening investors’ plans.
According to the survey, 42.6% of investors said the new lending restrictions were affecting their investment plans, up from 33% in the previous year.
“The finding does not come as a surprise when you look at the current environment we are in. Over the past couple of months, we have seen a number of Australia’s lenders introduce a raft of changes in relation to investment lending,” Mortgage Choice chief executive John Flavell said.
Flavell said that investors were having to seek out new sources of funding, or even entirely reconsider their intentions to purchase. The survey found that 51.5% of Australians believe the changes will cause a reduction in the level of investor activity over the coming 12 to 24 months.
Flavell said that the changes meant that the home loan market was becoming more difficult to navigate.
“Australia’s property market has become increasingly complex in recent months. In my 25 years in the finance industry, I have never known the mortgage market to be this complex and confusing."