ANZ joins investor lending retreat

More good news on housing from the AFR:

ANZ Bank on Thursday said it would no longer offer interest rate discounts to new property investor borrowers who did not also have an owner-occupied home loan with the bank.

…An ANZ spokesman said the change in discounting, effective immediately, meant the bank would no longer offer discounts off its advertised rate, which is currently 5.38 per cent.

“For customers with Investor only lending, ANZ will only offer advertised rates with no discretionary pricing available,” the spokesman said. “For customers with existing owner occupier lending, ANZ will continue to offer discretionary pricing on their investor loans.”

Houses and Holes

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 fouding 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.

Comments

  1. Anyone determined to get their dodgy investment loan can still go to non bank lenders though ? So is it really stopping many people ?

  2. note quite sure this is that good is it – its basically saying if you have a home loan AND and investment property loan you are A OK.

    but if you only have an investment property then you won’t get a discount.

    Maybe I’m missing something

    • “Maybe I’m missing something”

      It’s reducing the potential pool of ANZ borrowers and ensuring that they know more about those that do borrow from them.

      And unless all property investors are stupid (I know at least some are) then even these relatively timid lending restrictions should be starting to raise some questions in their minds.

  3. reusachtigeMEMBER

    Surely something is going on! Has the wet lettuce been dipped in acid (still light though so probably just citric acid at this stage).

    • wasabinatorMEMBER

      It doesn’t matter, just ends up leaving less obstacles for good looking aliens to buy.

  4. Unless the whole industry takes a similar approach this is meaningless. Investors will just go with cheaper lenders.

    • flyingfoxMEMBER

      Westpac, ANZ and Bankwest (CBA) have announced some form of tightening. Others may follow.

  5. The effects of tightening lending will be cumulative (unless The Big Bang happens first). Little by little, lending at the margin is curtailed, little by little demand is lesser and lesser. This won’t affect foreign investment though.

  6. The joke is if the big 4 need to raise rates to maintain profitability, they highly likely will.
    And there is little the great majority of mortgage holders can do about it.

  7. IKnowMoreThanYou

    Look, banks are starting to pull their heads in but Bankwest’s tightening will NOT lead to CBA doing the same thing. Its much easier to grow Bankwest’s portfolio by greater than 10% (low base) than it is CBA.

    What is with the 10% figure anyway? Its so arbitrary and arguably still too high

    • Awilbi Fahyed

      Too high? Yes.
      Based on FOI documents the 10% is kind of a put your thumb in the air and guess figure.
      In theory, the APRA wants to let banks grow their investment lending portfolio by the equivalent of income growth pace. Of course incomes are not growing anywhere near 10% but the argument from the boys at Martin Place is that some banks will widely undershoot the 10% target, so everything is hunky-dory. What could go wrong.

  8. BenjaminHDMEMBER

    I’m a finance broker. Here is a summary from a few lenders who have made recent policy change announcements:

    Bankwest (I’m in WA so BankWest is a relatively big player here) – maximum LVR 80% for investors. This means they will not do an insured loan (that is a loan subject to LMI) for an investment purpose.

    ANZ/CBA/NAB – no discretionary pricing for investors.

    No official announcement has been by Westpac yet. We’re getting informal feedback from our RMs that Westpac will be falling in line with the other four.

    What this means is that over the last 12 months or so it has become standard to seek and obtain discretionary pricing. So the lenders all have their standard variable rates. They all then have some sort of package whereby if you can fog a mirror you qualify for a discount rate. No one pays the SVR anymore.

    The discretionary pricing meant that we could obtain further discounts.

    So with ANZ, for example, their Breakfree package gets you 0.90% off the SVR for the life of your loan (so currently 5.38% – 0.90% = 4.48%). My most recent discretionary pricing achieved 2 weeks ago was 1.15% off the SVR (5.38% – 1.15% = 4.23%). I should note this is for an owner occupied loan.

    It is the opportunity for this discretion to go beyond the Breakfree 0.9% discount that has been switched off for investor lending.

    It is still available for owner occupied lending. Or if you qualify under the criteria noted in the Fin Review article.

    Also, with respect to foreign investors, St George, who was historically the most flexible in policy terms for non-resident non-Australian citizen lending, have significantly reduced their maximum LVR to these purchasers to 70%. We would think it is likely the majors will follow.