Under fire over hot property
BANKS have been accused of undermining efforts to cool the property market.
Major lenders are under fire from housing affordability lobbyists for ramping up efforts to target investors, just months after the banking regulator said it was cracking down on investor lending.
Commonwealth Bank, ANZ and Bankwest have all slashed rates on controversial interestonly loans in a bid to lure investors during the traditionally strong spring property season, sparking fears first-homebuyers will again be pushed out.
First Home Buyers Australia director Taj Singh warned the moves could reheat Sydney’s property market and lead to an investor domination.
“We had seen a bit of an investor slow down which was giving first-homebuyers a chance,” Mr Singh said. “But this could make (investors) come back and push firsthomebuyers out again.
“Spring is the time when the most property is bought and sold but it could be a bad time for first-homebuyers.”
In March, the Australian Prudential Regulation Authority announced it was clamping down on interest-only loans.
Considered higher-risk, interest-only loans are favoured by investors as they are not required to make payments on the principal loan and therefore are able to borrow more money. They are also more profitable for banks.