The effectiveness of APRA’s crackdown on investor lending has been "overstated", according to CoreLogic RP Data senior research analyst Cameron Kusher.
Speaking to Mortgage Business, Mr Kusher said the success of the prudential regulator’s efforts to cool investor credit growth has been “somewhat overstated”, pointing to the latest credit growth figures from the Reserve Bank of Australia, which show a marginal contraction.
“If you look at housing credit growth for investors it got up to about 11.1 per cent on an annual basis,” he said. “It has now come down to 10.7 per cent.”
As Australian lenders continue to target owner-occupiers with discounted home loan rates, the impact of having to tighten investor credit becomes diluted, Mr Kusher said. “Overall, I don’t think it’s going to have a huge impact,” he said.
New residential developments in Sydney and Melbourne and, to a lesser extent in Brisbane, will be most affected, Mr Kusher said, adding that one positive outcome for financial stability is that APRA’s lending limits will prevent ‘marginal’ investors from entering the market.
“It means those marginal people coming into the investment space that possibly shouldn't be in a position to invest in property in the first place are now not going to be able to do so and, from a financial stability point of view, that’s a good thing,” he said.
HSBC Australia has become the latest lender to react to regulatory pressures, announcing last week its decision to limit investor loans to its existing customers.
Graham Heunis, head of retail banking and wealth management for HSBC in Australia, said the bank has put “a number of measures in place to address the needs of our customers and adhere to our regulatory responsibilities”.
“These mechanisms include limiting investor home loans to existing customers only, as well as providing owner-occupier customers with a highly competitive variable rate,” Mr Heunis told Mortgage Business.