09 May 2017
First posted on Propertychat.com.au
Behind the media noise and ho-ha about housing affordability, this budget will have some interesting future financing implications for property investors.
APRA are going to get:
What this means is non-bank lenders that determine their own serviceability metrics will slowly fall into line with APRA guidance. Hello Liberty.
Simply shifting risk to the shadow banking sector isn’t ideal for financial stability, so now they’ll have the power to address this risk and govern the non ADI lenders.
Legislation will need to pass first, but i’m sure there’ll be no roadblocks to something like this. Typical process is it takes a month or two to draft it up and get it through at next available sitting session thereafter. Non banks may move in anticipation though.
There must be some legislative power technicality that restricts APRA from implementing geographic based control.
This does raise questions.
APRA’s clearly asked for these increased powers. I suspect their game planning Sydney and Melbourne specific controls (similar to NZ) and need legislative changes to be able to do what they may do.
What does this mean?
Have dug out the measures for those that are interested. See below: