ANZ is the first bank to move, increasing mortgage rates for investor loans by 27 basis points effective from August 10. The bank says it is following instructions from the banking regulator, the Australian Prudential Regulation Authority (APRA).
On Monday APRA announced increases to average risk rates for Australian residential mortgage exposures by Internal Rating Based (IRB) banks. (‘Banking regulator announces tighter capital adequacy requirements for residential mortgages‘)
ยป ANZ raises property investor interest rates to cool demand – The ABC, 23rd July 2015.
Increase in gst to 15% will sink this ship Australia.Now that the real economy has been destroyed.The locals don’t have a job to pay the tax for the interest that has to be paid to the banksters central.Bingo tax the new investors and broke locals.Our facade leaders have no emotion.They must be really stupid.But now I realise they are just reading the script like the newsreaders.OZ dollar going down by plan.
I have one investment property and dont like to read this BUT it needs to be done and more of it. To many people think this thing cant bust. The good thing is my investment property is cash positive even at interest rates going up 2-3% but then I am overseas in the US and have US dollars. I can only imagine all the people that are going to sweat every .25% or.5% rise in interest rates. They got to cool this thing down.
Someone mentioned here last week about the government no being as silly as it looks,
After thinking about it, it’s like the kid in the outfield who dosn’t want the ball hit to him. Is the government “tanking”?
It is a logical foresight to think you don’t want to be the on-shift skipper when the ship finally hits the rocks and flounders.
It’s gonna pop, but like a truck tyre not a kids baloon.
Really just a band aid applied to a severed leg in an attempt to keep the homeless natives quiet and ever hopeful that they too will own a grass hut one day. Everybody knows as the economy contracts the RBA will panic and lower interest rates to ZERO or worse and the banks will follow.
The Government know absolutely whats going on , don’t think for a second that they have your best interests at heart. Its about time everyone adopted this frame of thought and stopped watching Friday Night Football and Masterchef.
Doesn’t an interest rate increase for Investors simply make the negative side of their gearing more attractive?
Now instead of tax payers funding private investors in the housing market, it is less transparant as we fund through the housing market into the bank and onto cash investors?
Am I missing something?
Why is the Bank doing the regulating? Isn’t regulation a function of government? Is this type of self regulation the wrong way to cool the market?
As the old saying goes……if you want to grow dope, plant a politician.
The Commonwealth Bank has today followed suit, hiking 27 basis points effective 10th August – the same than the ANZ.
Classic,classic move.
APRA says cool demand.
The response should be simple! Increase the deposit necessary, or even stop lending for negative gearing (Here’s an idea: Say you work part time at a supermarket, but you want to start a business that will loose money for certain, but you promise to use your supermarket wage to top up the difference, would the bank lend to you? Of course not, but they will if that ‘business’ is a residential mortgage: Financial suicide, but anyways)
But no! That’s not how we cool demand is it Mr. Banker? No, we charge a higher rate to those already addicted to our products!
this is the new business model: It started with venture capitalists and the dot com boom: Give your product away for free to grow your user base, then charge them when they’re hooked!
They know damned well, this will in no way ‘cool’ demand. As comment #6 above says, it only makes negative gearing easier, and more ‘effective’.
And the rise in the GST…well, it’s the death of Australian small business. I often comment to those that listen, my business has a margin of ~7%.
That’s after I risk the capital.
Invest >70hrs per week.
Take charge of the employees income tax, their insurance while driving to and from work and while at work, and provide for their retirement
Give up ‘entitlements’ such as sick days, holidays, long service leave, overtime etc for myself
So I do all of that for $7 dollars out of every $100 that come over the counter….
And yet the *expletive* in Canberra STEAL BY LAW $10 out of every $100, and now believe they are entitled to $15 per $100!
Can anyone tell me, as an entrepreneur what the government provides in return? It sure as hell aint a just and safe society.
It’s never been clearer in the last 100 years what bankers, and especially central bankers aim to do: Greece is the prototype.
Strip entire countries of their sovereignty and all assets. The only thing Greece ‘owns’ now is a tax base, but that is practically worthless as their economy is destroyed from the inside out. The government has had to privatise everything, slash spending and still grovel and beg to the banking cartel.
It has never been clearer: Banks are out to take everything you own: the government is simply directed by the banks to see that this happens.
@ Matty
Totally agree, the fix is in and we COULD actually be the next Greece with the slowing Chinese GDP, dollar collapsing and with Larry Curly and Mo in charge of our economy. All we need now is higher taxes, a crashing RE market and BINGO, banksters take everything.
http://www.zerohedge.com/news/2015-07-24/aussie-dollar-tests-long-term-trendline-china-contagion-spreads
Hey everyone. The Federal and State governments are considering raising the GST. Again all taxpayers will be forced to subsidize many minority groups like investors, negative gearing, private schools etc. etc. to pay for them to become even more wealthy. Abbot, who supports drug dealers, as evident from his support of two in Indonesia recently, stated he will not rid negative gearing because it will raise taxes of which contradicts his efforts and promise to lower them. Hockey who is the child of Real Estate agents and his wife is a millionaire banker supports this despite the obvious conflict if interest when it comes to his support of ever rising house prices. The corrupt Liberal Party millionaires along with the equally corrupt Labor Party of millionaires have yet to disclose the sources of their party and election campaign funding. Their incompetence and hypocrisy is evident from this article. They force banks to clamp down on investors and yet the law allowing superannuation funds is still in place. These are the people the voter has put in power.
As Max D Leverage suggests – it will work out to favour of the bankers….create a bubble and when it collapses mop up the distressed assets.
Matty, if that is what you are putting in, I can’t help but to wonder what the return is for you? Life is short mate.
I kinda like the idea gradually opting out of this very broken system …. finding greater resilience and self reliance.
Just a passing thought.
@Matty
Thankfully, Daniel Andrews has voted down a GST increase. NZ has increased GST from 9% (when introduced) to 15% now, and many other countries do have higher GST than we do.
Increasing GST will make Aussies shop more online from overseas and make business more uncompetitive in Australia. Not to mention its a regressive tax too.
This has to be, arguably, one of the most ridiculous notions put forward by politicians in some time.
@9. Well said Matty, now all we have to to is get it through the thick heads of the complacent morons and pedestrians populating this country and we might get somewhere.
@ Matty,
Yup. Well said.
Go ahead lie to me…
Another great post from The Idiot Tax blog.
http://www.idiottax.net/2015/07/land-of-lie.html
Will some of the investors attempt to sell based on this? Surely some have to.
This is what Australia gets for being hangers-on in a global economy. I have always been of the view that a nation should be self sufficient and only trade in surplus. I think an island nation like Australia especially should shield itself from outside forces. Build a strong Australian front then go to the world. Its hard to even feel Australian nowadays.
Max D@10, Lexus@12, both good points. Banksters rinse and repeat, like they always have. Pump markets up, get out, pop them, buy assets back at cents in the dollar. First twigged after some of the most notorious property bulls in this country sold out in recent times, then called bubble and the need for rate rises.
The bank actions are increasing their safety in terms of a price pullback and also protects us against he bailing of our money, BUT it only slows down Australian buyers, NOT the wall of overseas buyers who have spent much more here in 1914 in Sydney and Melbourne than London and other places…
how about a 20% GST on overseas property purchasers??? would give locals a bit of a chance. t.
Hongkong had to do and it slowed down the asian buyers..
Look at Ormond for example in Melbourne, beautiful homes knocked downing a row to build new horrible units for sale to overseas investors who likely will never rent them out, more ghost suburbs.
The bank actions are increasing their safety in terms of a price pullback and also protects us against the bailing in of our money, BUT it only slows down Australian buyers, NOT the wall of overseas buyers who have spent much more here in 1914 in Sydney and Melbourne than London and other places…
how about a 20% GST on overseas property purchasers??? would give locals a bit of a chance.
Hongkong had to do and it slowed down the asian buyers..
Look at Ormond for example in Melbourne, beautiful homes knocked down in a row to build new horrible units for sale to overseas investors who likely will never rent them out, more ghost suburbs.