Un­der fire over hot prop­erty

The Daily Telegraph (Sydney) - - News - ANNABEL HEN­NESSY

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.

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