From BS:
HSBC has quietly turned off the tap to new customers seeking loans to buy an investment property as lenders step up efforts to comply with the financial regulator’s growth cap.
Highlighting the range of approaches being used to cool growth, HSBC stopped writing investor loans to new-to-bank and credit card-only customers “until further notice” to help manage its “regulatory obligations to keep investor home loan growth below 10 per cent per annum”.
Interestingly, like AMP, HSBC was growing its specufestor loan book around 10% in July so it didn’t have to shut it completely. This looks as much a risk management move as it does regulatory compliance.
Meanwhile, Highrise Harry is spooked, from The Australian:
“We must tell APRA (Australian Prudential Regulation Authority) that the whole building industry is based on investors.
“It is being underpinned by very low interest rates, and shares are no good (for investment),” the country’s second wealthiest person and founder of apartment developer Meriton Group said. Such actions could start a cycle of falling prices and declining building starts. “APRA thinks its is protecting the banks; I say they will send them broke,’’ he said.
…With mining’s contribution to the economy waning and business confidence fragile, Mr Triguboff noted “we have nothing left but building”.
The problem is not that APRA is tightening but that it waited far too long to tighten and it has thus become pro-cyclical.
