Any active property investor will be aware of all of the talk in the media about APRA clamping down on lending by the Australian Banks and Financial Institutions to property investors in an attempt to cool the Sydney and Melbourne property markets. For much of the past 6 months we have not seen a great deal of change, other than perhaps a reduced appetite for investment loans being reflected in reduced or limited advertising by some banks of these products, however that is now changing.
Bankwest is the latest Bank to put in place measures to actively discourage property investors. In Bankwest’s case they have removed from the loan approval calculations any tax advantages arising from the negative gearing of loans. By removing these sums from the loan assessment, applicants will be able to borrow less.
The Australian Financial Review has reported that the Commonwealth Bank may be next in line to implement the same change.
At the end of the day it shouldn’t impact on the market as there are still many Banks that are actively seeking to build their property investment loan books and will not be applying these restricted policies. It may however be a sign of things to come in the Sydney and Melbourne property markets do not cool, and APRA continue to put pressure on lending by Australian Banks to property investors.