NSW Investors beaware of changes since 01July

Went to a agent today to look at some HnL package and he was telling that there will changes for investors from 01July and new laws will be tough so buy it soon. When asked for details he said he is not legal advisor or accountant: )

Any insights guys?

 

Yeah he wants to make a sale.

 

He's just generally referring to APRA regulations on the banks.

Increasingly you'll see 80% LVRs in the new suburbs in western Sydney. IO loans will also be harder to get.

 

That is correct.

Here is what is happening on policy changes ...note a guideline and not blanket as it will vary by lender:

1. No more I/O only loans on PPORs
2. I/O on IP loans if you are under 80% LVR
3. Post code restrictions across new suburbs Sydney but also across old suburbs like Wentworthville, Toongabbie,
4. Retrictions on period of I/O loans expected to reduce to 5 years
5. Servicing changes - 7.8% assessment rate, increased rates for investors with more than 2 properties etc.

So what is the impact.. downstream it will definitely slow higher priced Sydney...the newer suburbs in Sydney will wear the most pain...

 

>>> can you explain in details im unable to understand why only new suburbs will get hit?

 

The valuers already slightly undervalue due to lack of history...so if you bought a land say in Scofields in later releases for say 500k instead of say 380k....that could cause issues with vals.

So in the early stages a H+L was 600k...now they want around 850k in some instance...then it get interesting....so what does one do when their 850k dream home vals at 750k?

That is a 100 down. People are I have that really...if they havea 80% lend restriction ....80% of 750 is 600k...you people need to come up with 250k just to get in......therein lies the issue...