A series of lenders have moved on rates in the past few days, with increases from AMP, CBA, ANZ, NAB, Homeloans, Bendigo Bank, St.George and Westpac ranging from 0.07% to 1.17%.
Commenting on the banks’ moves, AMP Capital chief economist Shane Oliver told Mortgage Business: “What they’ve done is entirely rational, they’ve covered their funding cost increases over the last six months, they’re responding to the regulators – APRA & ASIC, and also responding to the strong demand from investors for loans by putting rates up.”
Investor lending in APRA’s crosshairs
Many of the banks cited APRA’s macroprudential measures as one of the reasons for hiking their rates.
AMP’s Mr Oliver explained that currently APRA seem to be providing guidance to banks & issuing orders behind the scenes, however they are likely to make a public announcement in the near future.
“I think ultimately just to reinforce the point they probably will be more public at some point, and I suspect that an element of that will be a reduction in the speed limit for lending to property investors. I suspect that it will be lowered to 5 or 7 per cent or something like that, with probably some other measures as well.
His comments come after Morningstar outlined the likely action APRA will take to curb investor lending as the impact of its initial efforts to cool the market appear to be fading.
“Increasing concerns of an overheating housing market are likely to prompt APRA to act to slow the rate of growth of residential investor home loans,” Morningstar analyst David Ellis warned.