Competing over scraps

THE banking regulator’s move to ease constraints on residential property lending will have little impact on the level of competition for commercial property, an industry expert says.

Competition in the commercial market is intense and will keep rising because of a scarcity of investment opportunities, according to Charles Cini, chief executive of commercial property agency and consultancy group CVA.

Mr Cini said, regardless of the Australian Prudential Regulation Authority cap, there are not enough investment opportunities to convince small property investors to move away from the residential market.

APRA last month scrapped its speed limit on growth in lending to residential property investors. Banks were previously required to limit growth in loans to investors to 10 per cent a year to take heat out of the housing market. The cap has now been dropped for banks who have been below the threshold for the past six months.