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Investors finally get APRA’s message

APRA is getting its way…

The latest ABS Housing Finance data shows a sharp drop in investor housing commitments.

The value of investment housing commitments in July fell by $460 million or 3.9 per cent from the previous month, according to the seasonally adjusted figures.

The last out-of-cycle rate hikes for investors and customers paying interest-only were announced and enacted in June.

“The timing of this drop says it all,” said RateCity money editor Sally Tindall.

“In June we saw the big banks lift rates for investors. The very next month, almost half a billion dollars of investors dollars fell away.

“Today’s ABS figures confirm that investors are finally getting APRA’s message,” she said. 

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RateCity data shows the difference between owner-occupiers paying principal and interest and investors paying interest-only was on average 0.65, but can climb as high as 1.94 percentage points.

For example, St George’s basic home loan offers owner-occupiers paying principal and interest at rate of 3.80 per cent, while investors paying interest-only on the exact same loan are asked to pay 5.74 per cent.

“It’s no surprise some investors are getting cold feet. If they don’t shop around they can get stung by almost 2 percentage points. That translates to $173,271 on a $350K 30-year loan.

Dwelling Finance

State Based finance

Source: Property Council Australia

Residential Snapshot

Source: Property Council Australia



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Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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