The Sydney property market has plateaued – with prices for both houses and units off the boil since June 2017 as the peak (Domain March Quarter House Report – Apr 26th).
APRA played a large part in this Sydney slow down by applying investor restrictions to the entire country (that was unfair, in my opinion). To APRA’s credit they have now (announced 9:02 am Apr 26th) removed these restrictions.
How this will now play out in the home loan market will become clear in coming days – but here are my predictions and their significance for you:
- Banks have been “loading” rates to investors and using that loading, offering spectacular deals to owner occupiers. For the last two years “owner occupiers” have been the “only game in town”.
- Banks will now reduce rates for NEW investment loans – to compete for business … BUT
- This probably signals the end of the best deals for owner occupiers so, if you are thinking of buying a home you would be foolish to delay.
- Banks have terrible form in reducing rates for existing customers. I would expect the best way for existing investors to respond is to wait and see – threatening to refinance will probably be the best way to get a better rate.
- Interest only loadings have been applied by ASIC (not APRA) – I expect those to remain for now.
This is VERY big news – I will have more to say as this unfolds.
As always you can call or email me anytime.