APRA’s investment loan growth cap short-sighted
Australians investing in real estate to grow their personal wealth are being targeted by the Australian Prudential and Regulation Authority (APRA), and harassed by the banks, MoneyQuest believes.
The finance specialist’s managing director, Michael Russell, said APRA had “burdened” the banks with the 10 per cent investment loan growth cap that was introduced in 2014 without considering unintended consequences.
“APRA’s response to reign in investor housing has been so short-sighted, that it’s further fuelled my support of uninterrupted markets,” Russell said.
He said curbing investment housing demand lead to the increased investment loan interest rates of new and existing investment loans.
Russell noted that towards the end of each month some banks were becoming so fearful of breaching the cap that they were electing to cancel purchase settlements and rebook the next month.
“When this happens the consequences can be particularly dire, not only for the purchasing investor but particularly for the unfortunate vendor who is often dependent upon the sale of their property to fund a simultaneous purchase,” he said.
“The vendor of that second purchase is then an unwilling participant in the collateral damage that is impacting for too many hardworking everyday Australians.”
Russell said if APRA was intent on interfering to cool the housing market then it must consult will all stakeholders to minimise the short and long-term distress of everyday Australians.
“That’s right, these everyday Australians who are investing in real estate to grow their personal wealth, are being targeted by APRA and harassed – under APRA’s instructions – by the banks,” he said.
“…My question to APRA and the Federal Government is ‘Do you really want every day Australians to stop saving and investing in property in favour of doing nothing and praying the Government can fund their massive pension liabilities in the years to come?’”
Recommended for you
With the highest number of candidates in a year sitting the latest financial advice exam, a surge of new entrants are expected in the coming weeks, according to Wealth Data.
AMP has launched a range of five diversified index managed portfolios on its North investment platform, targeting a younger client demographic.
An NSW adviser, who advised over 120 clients after falsifying her financial advice exam results, has been permanently banned by ASIC.
ASIC has released the results from the latest financial adviser exam, the first to be run since changes to its structure earlier this year.
