One bank has tightened its investor LVRs due to APRA pressure – but nine others are growing their investor lending faster than a key risk indicator.
APRA’s campaign to rein in the investor sector is gathering momentum after one lender decided to tighten its investor lending.
As of today, Bankwest will apply a maximum LVR of 80 per cent for investment purposes, including buying shares.
Bankwest said its position as a “responsible lender” had prompted this change of policy.
“In recent weeks, Australian banks have started tightening investment lending to comply with expectations set by APRA,” according to Bankwest.
“These expectations aim to ensure sustainable growth in the home loan investment sector to protect both investors and the home loan market.”
APRA’s campaign against investor lending started last December when it told banks that it would take steps to reinforce sound mortgage lending practices.
Since then it has gradually increased pressure on lenders, including in a speech last week by chairman Wayne Byres, who issued a warning about “heightened” mortgage risks.
The regulator said in December that one of its “specific areas of prudential concern” was lenders growing their investor portfolios by more than 10 per cent per annum.
APRA said that the 10 per cent benchmark was not a hard limit, but a key risk indicator based on income growth and market trends.
According to APRA’s latest monthly banking statistics, for March, nine lenders that service the third-party channel had investor growth above 10 per cent.
Macquarie Bank’s investor lending grew by 79.4 per cent compared to 56.1 per cent for its owner-occupied lending.
Teachers Mutual Bank had 35.1 per cent investor growth and 10.1 per cent owner-occupied growth.
ME Bank had 32.4 per cent investor growth and 14.9 per cent owner-occupied growth.
P&N Bank increased its investor lending by 26.5 per cent and its owner-occupied lending by 6.5 per cent.
NAB increased its investor lending by 13.6 per cent and its owner-occupied lending by 7.3 per cent.
AMP Bank experienced 13.4 per cent investor growth and 6.2 per cent owner-occupied growth.
Suncorp Bank experienced 12.2 per cent investor growth and 5.6 per cent owner-occupied growth.
ANZ experienced 10.4 per cent investor growth and 7.4 per cent owner-occupied growth.