So why are these changes happening?
News stories about the booming property market are almost a daily occurrence. One of the driving factors has been a big increase in the number of active property investors. In an attempt to reduce perceived risks to Australia’s financial system, APRA (the government body that regulates the big banks) is requiring banks to reduce the amount of new lending they are providing towards investment property purchases.
What changes have been made?
APRA’s requirements have resulted in varied reactions from Australian banks. Some of the more common approaches banks are implementing to cool down the investor market include:
- Increasing interest rates on investment loans and/or loans with interest only repayments. So far these increases range from 0.25% up to 0.47%, with a handful of banks yet to announce their changes. Other banks have advised they will no longer be providing additional interest rate discounts for investment loans.
- Reducing the loan to value ratio they will lend at for investment purposes. Some banks are limiting new investment loans to 80% of the property value, and one bank has pulled out of providing new investment loans altogether.
- When calculating your borrowing capacity, banks will now enforce stricter assessment criteria which will likely reduce the amount you can borrow, especially if you already have a number of properties/loans.
for your property investing?
We are pleased to have Simon Stoll from Acceptance Finance come and talk to the group about this very important topic. Simon has been working within the finance industry since 1995, working with various lending institutions acquiring a wealth of knowledge in Commercial & Residential lending. Prior to joining Acceptance Simon ran his own successful independent brokerage for 8 years. Simon joined the Acceptance Finance team in 2010, his broad understanding of financial services is complimented by the team around him, providing his clients with a holistic financial services approach. Simon understands that the secret to success is providing superior service supported by knowledge and experience.
Simon will cover:
- What you should be doing right now about your current investment loans.
- Looking to purchase an investment property? – How to best ensure that you meet current bank requirements.
- What finance parameters to consider when doing your investment planning.
Simon will cut through all the jargon and show you what’s possible. What one bank can offer you now may be very different to what’s on offer by another bank.
If you are in property investing you CANNOT afford to miss meet up!
We are exited to have Matthew Baxter from Opteon (Victoria) come and talk to the group abou this exact topic.
Previously in the role of Regional Manager, Matthew managed a team of 40 residential and commercial Valuers, is a Certified Practicing Valuer (CPV), and has undertaken valuations in a wide range of property classes. Mathew’s current role involves promoting Opteon’s capability in non-mortgage property advice.
For a property investor the role of the valuer is crucial in managing their equity and loan accounts. Matthew plans to discuss how a valuer goes about the process of a valuation. In this discussion he plans to cover:
- The valuation process
- How a bank reads a valuation report
- Risk ratings and the valuation
- How a valuer analyses sales evidence
- Can a valuation be challenged?
- Is Melbourne in a property bubble?
- Where do Valuers think the market is heading?
There is plenty of parking and remember, you are always welcome to bring along friends or relatives who are interested in property investing – it is all about networking with like-minded people!