Property investors are back, but baby steps, says APRA


first_imgInvestor and offshore buyers underpinned much of the inner-city apartment growth seen across the major capitals in recent years.PROPERTY investors will be welcomed back at banks and could even see interest rates drop after the national regulator APRA today confirmed an end to its clampdown on housing loan growth. The Australian Prudential Regulation Authority (APRA) announced in a statement this morning that it would remove a 10 per cent benchmark on investor loan growth it had placed on banks in 2014 but warned it would also enforce stronger lending standards.The action had been taken after major concern over the surge in higher risk lending across the financial system, according to APRA chairman Wayne Byres.More from newsParks and wildlife the new lust-haves post coronavirus19 hours agoNoosa’s best beachfront penthouse is about to hit the market19 hours ago“The temporary benchmark on investor loan growth has served its purpose. Lending growth has moderated, standards have been lifted and oversight has improved,” he said.“However, the environment remains one of heightened risk and there are still some practices that need to be further strengthened. APRA is therefore seeking assurances from ADI Boards that they will maintain a firm grip on the prudence of both policies and practices.”Lenders were informed of the move today, the APRA statement said, but each would have to three main criteria first.“In summary, for the 10 per cent benchmark to no longer apply, Boards will be expected to confirm that: lending has been below the investor loan growth benchmark for at least the past six months; lending policies meet APRA’s guidance on serviceability; and lending practices will be strengthened where necessary.”But don’t expect the heyday of investor lending to return any time soon, with APRA warning that lenders must “maintain prudent standards and close any remaining gaps in lending practices”.Those lenders who don’t meet the APRA requirements won’t be allowed to increase investor lending, the statement said.last_img read more