Via the AFR:
Heritage Bank, the nation’s second largest mutual, will stop offering property investment loans and is restructuring other products amid fears it will blow tough regulatory speed limits on lending growth after recent attractive offers attracted a deluge of borrowers.
It follows the decision of CUA, the nation’s largest mutual, to stop writing new loans for property investors because demand is so strong.
The combined lenders have about $17.5 billionof assets and account for about 1.5 per cent of the total property lending market.
Their withdrawal from the market highlights continued strength of buyer demand in Melbourne and Sydney at the beginning of peak Spring sales and the inherent disadvantage on smaller lenders of a blanket 10 per cent cap.
If macroprudential 3.0 is needed it should be to cut this cap to 5%.