Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 3
  • 9
APRA Macroprudential: Westpac, ANZ and CBA raise interest rates for property investors by 0.27%; NAB raises rates on interest-only home loans by 0.29%
Topic Started: 23 Jul 2015, 05:33 PM (10,742 Views)
Terry
Member Avatar


The Whole Truth
25 Jul 2015, 02:40 PM
Actually the trap is closing on all the investors that have bought over the past decade and seen no real capital gains. They will not be able to liquidate if they wanted to because the biggest buyer group, Investors, will be rapidly disappearing from the market. That's how ponzi schemes always end. With millions of investors holding a bag full of depreciating assets in a frozen market.
If what you suggested ever eventuated, those investors would be venting their fury at the government. Also, the pubs would be empty.
Profile "REPLY WITH QUOTE" Go to top
 
Perthite
Member Avatar


CBA have done the same.
Profile "REPLY WITH QUOTE" Go to top
 
zaph
Default APF Avatar


Trojan
23 Jul 2015, 06:39 PM
For those who didn't know, the banks are trying to comply by APRA's new rules.
Similar to those who ticked a box which said FHB, its just flows into the system and into a report at the end.

When you apply for a loan, just say you intend to move into it upon settlement and they will then tick the box which says owner occupier and give you the additional discount.
Of course, after it settles you change your mind and stay where you are but the loan has now settled as an owner occupied loan and the bank can report to APRA that they have fulfilled their mandate.
The banks may also see it as an opportunity to increase their profits. But is it more profitable to increase the IR by 25bps or grow lending? If the banks determine that the IR increase is more profitable I'm sure they'll fast find a way to determine what loans are investor or OO.
Profile "REPLY WITH QUOTE" Go to top
 
Trojan
Default APF Avatar


zaph
26 Jul 2015, 10:03 PM
The banks may also see it as an opportunity to increase their profits. But is it more profitable to increase the IR by 25bps or grow lending? If the banks determine that the IR increase is more profitable I'm sure they'll fast find a way to determine what loans are investor or OO.
Considering the banks were more than happy to lend to PI and OO at the same rate before the new APRA requirements, it means the bank doesnt see the risk of investors at a higher risk nor do they need to increase the rate to be profitable. With APRA's new rule, loans to PI becomes artificially constrained and thus banks can charge more for them. If you tick the OO box, then banks has plenty of those loans go around and it keeps APRA happy - and its definitely better than losing you to another lender.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
Profile "REPLY WITH QUOTE" Go to top
 
John F. Kennedy
Default APF Avatar


Trojan
27 Jul 2015, 12:33 AM
Considering the banks were more than happy to lend to PI and OO at the same rate before the new APRA requirements, it means the bank doesnt see the risk of investors at a higher risk nor do they need to increase the rate to be profitable. With APRA's new rule, loans to PI becomes artificially constrained and thus banks can charge more for them. If you tick the OO box, then banks has plenty of those loans go around and it keeps APRA happy - and its definitely better than losing you to another lender.
I don't believe this. The rate rise is worth $850M to the four banks, if they all do that. You think they won't take that money? There is a silly theory going around that this is all a wink-and-nod conspiracy with APRA, to make investor statistics lower and OO statistics higher, as if it were all just political form over substance. "nor do they need to increase the rate to be profitable..." What does that mean? The banks have always been looking for excuses to gouge the rate, but usually in the past, have been told off by APRA or the Reserve Bank. This is a new paradigm. An APRA-sanctioned gouge. I'll bet they take the $850M and then another $850M.
Edited by John F. Kennedy, 27 Jul 2015, 01:12 AM.
Profile "REPLY WITH QUOTE" Go to top
 
zaph
Default APF Avatar


Trojan
27 Jul 2015, 12:33 AM
Considering the banks were more than happy to lend to PI and OO at the same rate before the new APRA requirements, it means the bank doesnt see the risk of investors at a higher risk nor do they need to increase the rate to be profitable. With APRA's new rule, loans to PI becomes artificially constrained and thus banks can charge more for them. If you tick the OO box, then banks has plenty of those loans go around and it keeps APRA happy - and its definitely better than losing you to another lender.
With our oligopolistic banking system if everyone has to play by the same rules and silently colludes then everyone can increase their IRs due to the big bad APRA. The bank of zaph can charge it's investor customers a higher rate because everyone else is. I'm arguing, and not sure that I'm right, that if all the banks can get an extra 25ish bps off investors then it's more profitable than them trying to grow the investor market. I don't know if it's going to more profitable for the banks to hold the hand of an investor when they tick the box or just grow the market. What I do know is if the banks want to charge PIs more, they will, and largely they'll be able to work out what loans are to investors.
Profile "REPLY WITH QUOTE" Go to top
 
Admin
Member Avatar
Administrator

Why home loan interest rates are headed higher

Investor loan re-pricing to give a solid boost to bank earnings
Follow OzPropertyForum on Twitter | Like APF on Facebook | Circle APF on Google+
Profile "REPLY WITH QUOTE" Go to top
 
provocateur
Default APF Avatar


The banks doing this are going to be screaming uncle when their bubble-fueled profits go up in smoke and they need a bailout.
Profile "REPLY WITH QUOTE" Go to top
 
Trojan
Default APF Avatar


zaph
27 Jul 2015, 01:12 AM
With our oligopolistic banking system if everyone has to play by the same rules and silently colludes then everyone can increase their IRs due to the big bad APRA. The bank of zaph can charge it's investor customers a higher rate because everyone else is. I'm arguing, and not sure that I'm right, that if all the banks can get an extra 25ish bps off investors then it's more profitable than them trying to grow the investor market. I don't know if it's going to more profitable for the banks to hold the hand of an investor when they tick the box or just grow the market. What I do know is if the banks want to charge PIs more, they will, and largely they'll be able to work out what loans are to investors.
I guess the way I see it is this: if the banks wanted to collude to increse their interest rates and profit margins, they didnt need APRA to issue its mandate, they could have easily done it via reducing the discount rate (which was up to 1.30%).
But what APRA has done was effectively increased the cost of funding of investor loans for the banks (via equity instead of debt) and thus they need to increase margins to maintain their ROE to shareholders. If you choose the product which costs the bank less (OO loans) then they don't need the increased rates to maintain ROE.

Also note the APRA mandate applies only to the big 5 (including Macquarie Bank). None of the smaller lenders were given the APRA mandate and (so far) none of them has raised their rates for investors. I guess we'll just have to wait and see.
Edited by Trojan, 27 Jul 2015, 01:26 PM.
I put trolls and time wasters on my ignore list so if I don't respond to you, you are probably on it ....
Profile "REPLY WITH QUOTE" Go to top
 
propertymogul
Default APF Avatar


Trojan
23 Jul 2015, 06:39 PM
For those who didn't know, the banks are trying to comply by APRA's new rules.
Similar to those who ticked a box which said FHB, its just flows into the system and into a report at the end.

When you apply for a loan, just say you intend to move into it upon settlement and they will then tick the box which says owner occupier and give you the additional discount.
Of course, after it settles you change your mind and stay where you are but the loan has now settled as an owner occupied loan and the bank can report to APRA that they have fulfilled their mandate.
That would be fraudulent.

No surprise coming from you though Trojan.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Create a free forum in seconds.
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 3
  • 9



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy