We think regulators are increasingly likely to cut the 10% IPL speed limit given concerns on housing lending. This could slow total HL growth from ~6.5% to ~5%, with CBA and WBC most at risk given their recent strong IPL growth. However, all banks are likely to do further targeted SVR repricing.
Lower IPL growth on the agenda? Regulatory scrutiny of investor property lending (IPL)growth is increasing, and we recently wrote that we wouldn’t be surprised to see the 10% growth limit reduced. The rhetoric from regulators is now getting stronger with the APRA Chairman stating last week that “Strong competitive pressures are producing higher rates of lending growth again… We therefore see no room for complacency”.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
