Despite changes by lenders and a fair amount of jawboning by APRA, investors seem undeterred. That’s what the latest housing finance figures from the Australian Bureau of Statistics seem to indicate. According to ABS data, the value of lending to investors constructing new homes jumped by 11.7% in the month of July, reaching a new all-time high.
This comes as lenders have hiked investment rates by an average of 30bps, a move described as unfair by the Property Investment Professionals of Australia (PIPA).
“Increasing borrowing costs for investors, and in some cases owner occupiers, who brought into the market some time ago, seems unfair and detracts from what should be the common goal of creating a balance property market,” PIPA chair Ben Kingsley said.
But NAB head of personal banking Gavin Slater said the hikes were necessary in the current ecomonic climate.
“From a property investor point of view, conditions are, particularly in recent times, very favourable.” Slater said in an interview with Fairfax media outlets. “Our perspective is that you look to the future, at some point interest rates will go up, and [we are] recognising that now is a really appropriate time to adjust our pricing to reflect what we believe is the underlying risk in that book.”
Click here for a pdf version of this article
Australian Broker, September 2015, Issue 12.19, page 4, by Staff Reporter