Forecasts of royal commission ‘triggering housing crash’ miss the mark
“With the Royal Commission Interim Report finally and conveniently landing just before the long weekend, the major banks will be relieved to see that there’ll be no heavy-handed regulation coming their way, and Treasury quite clearly keen to avoid any further tightening of household credit.
“Since the 10 per cent cap on investor credit growth is now removed, there’s plenty of headroom for investment lending to pick up from here.”
Mr Wargent takes aim at the “fake news” circulating on social media last week and repeated in a national newspaper that Westpac was “calling in” investor loans via a letter that nobody seemed able to reproduce and Westpac officially denied.
“If anything, the major banks will now be looking to attract new business from housing market investors,” he writes.
“Don’t take my word for it. Instead, take Westpac itself as an example since we’re on the subject, who won’t waste any time in hitting up the investor market now the Interim RC Report has been issued by immediately bringing back its refinance rebate, effective today.
“In fact, as soon as everyone’s had a chance to recover from the grand final double-header weekend, brokers will kick off this week by swamping customer inboxes with a refinance rebate blitz.”
Westpac is offering $1250 for every standalone property loan refinanced both for investors and owner-occupiers. Westpac also is giving 500,000 Velocity reward points for loans above $1 million and 200,000 points for loans of more than $250,000.
Yes, folks, reports of the mortgage banking’s death have been exaggerated.
In late 2014, APRA ruled banks could increase their residential investor loans by no more than 10 per cent a year. In April, the regulator announced the cap was going.
“The temporary benchmark on investor loan growth has served its purpose. Lending growth has moderated, standards have been lifted and oversight has improved,” APRA chairman Wayne Byres said.
There is another problem though for banks chasing investor business. Investors might now have credit extended to them, but as previously suggested here, punters are likely to be in no rush while the consensus remains that prices will remain soft for a while yet and rental yields are so low.
Our suggestion at Dual Income Properties is you look for positive income investments, and that way any changes in negative gearing or bank rates changes will not affect your life style or your long term investment plan, regards Gil and Mark DIP