Powered by MOMENTUM MEDIA
subscribe to our newsletter

Regulatory changes could backfire: Cigna

Moves by the regulators and banks to curb investor lending growth in Sydney and Melbourne will needlessly harm investors in other parts of Australia, according to a wealth group.

Cigna Wealth managing director Kent Leicester said changes that have been introduced to tighten up investor lending, such as raises to interest rates and LVRs, are penalising investors, and could cool the investor market nationwide.

“Our economy is in a two-speed cycle with the big property price increases focused on Sydney and Melbourne,” he said.

“Investors in places such as Brisbane and Perth are being unfairly targeted over the property boom in Sydney and Melbourne.

“Regulators and lenders need to be careful with how they deal with this, as they risk hindering the market in others parts of the country where real estate is not booming.”

Advertisement
Advertisement

Mr Leicester’s view on the investor lending crackdown is shared by Michael Davoren, managing director for RE/MAX Australia and New Zealand, who said APRA's 10 per cent investor lending limit could have unpredictable consequences.

“There is a very real danger in applying a national remedy to a problem that is not national,” he said.

“There is no boom evident in most places outside Sydney and Melbourne – and even within those markets, it’s not in all suburbs.

“There should be more engagement with financial and real estate industries before decisions are reached.”

Mr Davoren pointed to the use of macroprudential measures in New Zealand, where lending restrictions were introduced for people buying houses in Auckland.

PROMOTED CONTENT


“It didn't really impact where they wanted it to but it did cruel the first home buyer market,” he said. “Don’t strangle a market when and where you don’t need to.”

Regulatory changes could backfire: Cigna
mortgagebusiness

Latest News

The percentage of young adults looking to pay down their home loans has risen over the past five months, according to new data. ...

Despite the Reserve Bank digging its heels in on the timing of its cash rate climb, Westpac economists have predicted the right conditions w...

Customer-owned banks operate around four branches per $1 billion in assets, while the big four collectively run less than one shopfront per ...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

When do you expect the cash rate to start increasing?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.