As widely expected, Australia’s central bank decided today to leave the official cash rate unchanged at 2.0 per cent. In the statement following the policy decision, the Reserve Bank, as it has done over the past couple of months, reiterated “The Bank is working with other regulators to assess and contain risks that may arise from the housing market.”
Effective tomorrow, Westpac will require all new property investors to put down a deposit of at least 20 per cent, while ANZ will require a minimum 10 per cent deposit.
The moves by Westpac and ANZ follow NAB’s decision last month to cap maximum loan to value (LVR) ratios for property investors at 90 per cent. Early last month, ING Direct capped LVRs to the more exuberant NSW property investor at 80 per cent, leaving property investment loans to the rest of the country capped at 90 per cent. Commonwealth Bank subsidiary, BankWest was one of the first banks to move, capping Australia wide property investor LVRs at 80 percent in May.
The banking regulator’s statistics for May, published this time last week, showed ANZ, CBA, NAB and Westpac grew property investor loans by 10.6 per cent, 9.9 per cent, 14.1 per cent and 10 percent respectively year on year, some exceeding the 10 percent speed limit imposed by the regulator. The other “advanced” bank, Macquarie should have received a handful of demerit points companying its 86.8 per cent speeding ticket.
It is understood the banking regulator, APRA, wrote to banks (again) last week with a please explain on their investor mortgage book growth.
» Statement by Glenn Stevens, Governor: Monetary Policy Decision – Reserve Bank of Australia, 7th July 2015
» Westpac caps LVRs on investor mortgages at 80pc – The Sydney Morning Herald, 7th July 2015.
» House prices: bank lending practices face more APRA scrutiny – The Australian, 2nd July 2015.
» Property investor loans keep growing above APRA’s 10pc limit – The ABC, 30th June 2015
» Four Banks and an out of control mortgage market – Australia: Boom to Bust Blog, 2nd July 2015.
Posted in Australian Housing, Banking Regulation, Monetary Policy, Sydney Housing Bubble | 14 Comments »