Connect with us

Market Place

APRA to end cap on property investor loan growth



APRA to end cap on property investor loan growth

APRA is removing the 10 per cent ‘speed limit’ on investor loan growth.
Photo: Louise Kennerley

The banking regulator is axing a 10 per cent speed limit on bank lending to property investors, saying the cap has served its purpose and improved credit standards.

With Sydney house prices falling and credit growth slowing, the Australian Prudential Regulation Authority on Thursday said it would remove the cap for bank boards that could prove they had been following its guidelines on prudent lending.

In late 2014, amid a surge in borrowing by property investors and rapid house price growth, APRA took the rare step of setting a 10 per cent limit on the annual growth in banks’ housing investor loan portfolios.

The measure has rocked the mortgage market in recent years, prompting banks to jack up interest rates for housing investors, and demand borrowers stump up bigger deposits.

But on Thursday, APRA chairman Wayne Byres said it was prepared to remove the measure because there had been an improvement in lending standards and a slowdown in credit growth.

“The temporary benchmark on investor loan growth has served its purpose. Lending growth has moderated, standards have been lifted and oversight has improved,” Mr Byres

Even so, the regulator will retain a separate 2017 policy that requires banks to limit their new interest-only lending to less than 30 per cent of all new home loan approvals.

APRA also said there was “more to do” in improving other aspects of banks’ lending, including how they assessed borrowers’ expenses, their existing debts, and the approval of loans that fell outside of banks’ formal lending policies.

APRA said it expected banks to introduce limits on the proportion of new lending that could be done at “very high” debt-to-income levels.

“In the current environment, APRA supervisors will continue to closely monitor any changes in lending standards,” Mr Byres said.

“The benchmark on interest-only lending will also continue to apply. APRA will consider the need for further changes to its approach as conditions evolve, in consultation with the other members of the Council of Financial Regulators.”


Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Market Place

Flood suburbs leaving rest of Brisbane in their wake now



Flood suburbs leaving rest of Brisbane in their wake now

Houses in the suburb of Yeronga submerged by flood waters on January 13, 2011. House price growth in the area has bounced back to outperform the rest of Brisbane. Picture: Jonathan Wood/Getty Images.Source:Getty Images

BRISBANE suburbs devastated by record floods in 2011 have sprung back to beat the rest of the housing market, with one growing at double Brisbane’s five-year average.

New analysis has found that in 19 of the 20 suburbs affected by floods, house price growth was now outperforming the rest of the Brisbane market.

RiskWise Property Research found 95 per cent of the suburbs affected have gone on to deliver strong double digit capital growth over five years, with the top suburb Fig Tree Pocket notching a massive 52.7 per cent, double that of Brisbane 26.7 five-year average.

RiskWise CEO Doron Peleg said demand for properties in those suburbs far outweighed any concerns over flooding — especially given 2011 was considered “a once-in-a-50-year event”.

“That makes these homes a risk people are willing to accept.”

Flood suburbs leaving rest of Brisbane in their wake now

Friends pitching in to save a home in Bulimba after flooding on January 13, 2011. Picture: Eddie Safarik/AFP.Source:AFP

Mr Peleg said the financial risk was now considered to be lower than before the 2011 floods.

“That’s why we have insurance companies. And while they have revised their product offerings and premiums, which no doubt will be quite high, it is still possible to get insurance.”

While Fig Tree Pocket reigned supreme (52.7 per cent), price growth was solid in 18 other suburbs including Bulimba (44.7 per cent), Yeronga (42.4 per cent), New Farm (40.5 per cent), Tennyson (40 per cent), Indooroopilly (39.8 per cent) and Windsor (38.8 per cent).

Flood suburbs leaving rest of Brisbane in their wake now

Police patrolling flooded Fig Tree Pocket streets in 2011. Picture: Jono Searle.Source:News Limited

Also notching capital growth in the thirties were Hamilton (35.7 per cent), Norman Park (34.8 per cent), Corinda (34.7 per cent), Auchenflower (31.5 per cent) and Wilston (31.3 per cent).

Only one suburb of the 20 was running below Brisbane’s 26.7 per cent five-year average, with Pinkenba sitting just half that pace on 11.8 per cent.

Mr Peleg said the results defied post-2011 flood perceptions that the areas would see very poor capital growth and negative buyer reaction.

“Our research has shown the reality is completely different and the demand for them has eclipsed the negative perception. This is because these high-flood areas are truly well located on the river which is in high demand.”

He said some areas had also been rezoned which made them attractive to developers.

House Price 5-Year Growth in 2011 Flood Affected Areas:

Fig Tree Pocket (52.7 per cent)

Bulimba (44.7 per cent)

Yeronga (42.4 per cent)

New Farm (40.5 per cent)

Tennyson (40 per cent)

Indooroopilly (39.8 per cent)

Windsor (38.8 per cent)

Hamilton (35.7 per cent)

Norman Park (34.8 per cent)

Corinda (34.7 per cent)

Auchenflower (31.5 per cent)

Wilston (31.3 per cent)

Fairfield (29.8 per cent)

Kenmore (29.4 per cent)

Herston (28.8 per cent)

Albion (28.6 per cent)

Sherwood (28.4 per cent)

Milton (27.9 per cent)

East Brisbane (26.8 per cent)

Pinkenba (11.8 per cent)

Source: Riskwise Property, CoreLogic


Continue Reading

Market Place

Brisbane Rental Market Keeps Investors Optimistic



Brisbane Rental Market Keeps Investors Optimistic
The Brisbane residential market is showing some signs of recovery, as vacancy rates continue to fall across the Queensland capital. 

The number of vacant properties in Brisbane dropped below 10,000 to 9774 — to 3 per cent from 3.2 per cent in March, according to SQM Research data.

The national vacancy rate was unchanged at 2.1 per cent.

Asking rents for units in the Queensland capital also picked up in April, marking a slight 0.4 per cent increase to $367.80 despite asking rents for houses falling over the month to $446.40 (-0.3 per cent).

The slight fall in rental vacancies comes as demand for prestige property in Brisbane led to a 3.6 per cent price growth over the past year.

Melbourne saw a fall in its vacancy rate to 1.3 per cent in April representing 7,317 vacancies, down from 1.4 per cent.

Sydney’s rate was steady at 2.3 per cent representing 15,809, but up from 1.7 per cent a year earlier, while Canberra rose to 474 vacancies from 392 last month.

Adelaide dropped from 1.4 per cent vacancy to just 1.3 per cent, leaving 2,427 vacancies in April while Hobart’s vacancy rate inched higher to 0.7 per cent representing 219 vacancies from March’s 191.

“While vacancies remain tight, this is the sixth straight month of vacancy increases, signaling that the worse now could be over for Hobart tenants,” SQM Research managing director Louis Christopher said.

“We are finally seeing some rent relief in Hobart where asking house rents fell by 2.8 per cent over the month to 12 May, with a slight uptick in the vacancy rate there.

“In Sydney too, we are seeing some relief in rental costs […] but high rents remain a constraint for many renters, with unit asking rents still rising in most capital cities, apart from Darwin and Perth,” Christopher said.

Capital city asking rents for houses rose fell over the month to 12 May 2018 by 1.6 per cent to $554 a week, while unit asking rents rose 0.5 per cent to $445 a week.

The asking rent for a three-bedroom house in Sydney remained the highest in the nation at $726 a week while for units it stands at $525. Canberra follows at $619 a week for houses and $442 for units.

In Melbourne, asking rents for houses were down over the month by 0.7 per cent to $534 while unit asking rents rose by 0.7 per cent to $410.


Continue Reading

Market Place

Queensland’s population hits 5 million people today



Queensland's population hits 5 million people today
PHOTO: Is this Queensland’s 5 millionth person? Cordy Kerr-Kennedy was born yesterday in Townsville. (ABC News: Mark Jeffery)

Queensland’s population has tipped the 5 million mark today, Premier Annastacia Palaszczuk has told State Parliament.

Ms Palaszczuk said several expectant families were on standby to welcome the state’s five-millionth resident.

“Somewhere today a brand new mum and dad will be eager to meet their new arrival,” she told the house.

“The whole family will want to know: is it a boy or is it a girl? And the doctor will say, ‘congratulations, it’s a Queenslander’.”

Ms Palaszczuk said the two main drivers of the increase were migration growth, particularly from New South Wales, and from 60,000 babies being born in the past year.

Queensland's population hits 5 million people today
 The state’s five-millionth resident was born today.(ABC North Queensland: Nathalie Fernbach)

“Overseas and interstate migration is up by 50,000 people in the past year, 19,000 came from interstate … more than 12,000, or 230 a week, move from New South Wales to Queensland,” she said.

ABS data also revealed the fastest and largest-growing area in Queensland in 2016-17 was Pimpama on the Gold Coast, which grew by 3,000 people.

Large growth also occurred in Jimboomba on Brisbane’s south side and in North Lakes — a suburb north of the city — which both increased by 2,100 people.

Coomera on the Gold Coast and Springfield Lakes in Ipswich also experienced large growth up 1,400 people.

The State Government’s population counter gives a “synthetic estimate” of the number of current Queenslanders, assuming a total population increase of one person every 6 minutes and 22 seconds.

Earlier this year the Australian Bureau of Statistics (ABS) said Queensland’s population was growing at 1.7 per cent and was projected to tick over to 5 million in May.

ABS data released in March also revealed Brisbane was one of the country’s fastest-growing cities and had increased by 48,000 in 2017, hitting 2.4 million people.

Queensland's population hits 5 million people today
PHOTO: The ABS estimated Queensland’s population was growing 1.7 per cent a year. (AAP: Dan Peled)

ABS demography director Anthony Grubb said the state’s population had “come a long way” in the last century.

“In 1901 the population was half a million; a tenth of what it is today… it took 37 years to hit the 1 million milestone in 1938 and another 36 years to reach 2 million in 1974,” he said.

But Mr Grubb said population growth “picked up the pace” after that, taking just 18 years to reach 3 million then only another 14 years to hit 4 million in 2006.

Queensland could be leading growth state in future

Population demographer Dr Elin Charles-Edwards said although Queensland is not currently the fastest growing state, it is possible it could top the leader board later down the track.

‘Not in the short-term, but Queensland is coming up off a relatively subdued growth so perhaps we might be entering an era of more rapid growth,” she said.

Dr Charles-Edwards said the challenges that generally come with increased population could be managed in Queensland.

“As long as we keep up and don’t take our eye off the ball we can continue to absorb quite high levels of growth… but really it’s keeping up with the infrastructure that’s the key challenge,” she said.

Dr Charles-Edwards said it was important to note some parts of the state, particularly in western Queensland, were experiencing population decline.

“While the south-east corner is growing and also many Indigenous communities are growing, other parts of the state are shrinking,” she said.

“Perhaps we could do more to encourage people to move outside the south-east corner.

“If we were able to work out some way to decentralise our population, growth a little bit further up into the northern regional centres, I think that would benefit the growth of south-east Queensland.”


Continue Reading

Make your Super Work

smsf property investment smsf borrowing

Positive Cashflow

duplex designs, dual occupancy homes

Investment Property Advice

investment property calculator successin property