One of the key factors that has been contributing to the tougher property market conditions we have been experiencing over the past year or so has been the tightening of the purse strings by lenders. As we have mentioned before, part of this has been due to the market response to the Royal Banking Commission. It has also been due to the Australian Prudential Regulation Authority (APRA) placing caps on lending to property investors.
According to some respected analysts, APRA’s limits on investor and interest-only lending had contributed to the reported decline in home values across the country since the second half of 2017.
Of course, back in December 2018, APRA announced that it would be easing restrictions on lending for property investors. As a result, the rumour mill has been running strong with stories that this move would soon begin to have an impact, and those rumours seem to have become reality this week.
On Monday, (March 18th), the ANZ Bank announced that on March 25th it will restart issuing Interest Only loans for property investors. The ANZ says that these loans will be available to property investors with as little as 10% deposit, with loan terms of up to ten years.
This follows the admission in February by the CEO of the ANZ, Shayne Elliott, that the bank had been taking an overly conservative stance due to the increased scrutiny of the Royal Banking Commission.
Elliott was quoted as saying, “Consumer sentiment has remained generally subdued with uncertainty around regulation and house prices impacting confidence. While we are maintaining our focus on the owner-occupier segment, we acknowledge we may have been overly conservative in our implementation of some policy and process changes.”
With expectations high that other lenders will follow the example of the ANZ in coming weeks, it seems that the tide could well be turning for Australian property investors.
If you’re looking for more tips on how to make the most of the current property market, one good source is our booklet, “Fatal Real Estate Traps Exposed”. It’s FREE, so why not download a copy while you’re here, or you can arrange for a hard copy to be sent in the mail by giving our helpful Customer Service team a call on 1300 400 400.