Is all this APRA hoopdela actually an opportunity for investors

Great point, but I think @mrdobalina and you may be too soon.
The market needs time to work through the APRA changes and existing deals to fall through a few times.
Sellers are still expecting the high prices.
I'm keeping powder ready for about 3-4 months time, but girding the loins now doing the DD to jump.

 

If you are cashed up and have serviceability for debt, yes, you will most likely benifit for certain type of market and property.

As some of you said, if you sold prior to APRA changes, or have property in market, will benift most by having cash ready to grab right bargain.

If you are on 2nd,3rd equity release and were hoping to use that money to buy cheapie, Good Luck,

On other side,

I guess, it will also help plenty FHB,who have been sitting on fence for too long. I expect lot of new stock and entry level properties to be lot more active from here on.

 

Im not sure about the next 6months. I think IN about 6months will be better. These changes need time to flow through. I think there could still be a fair few buyers who had pre-approval (or at least a discussion with their finance provider) who don't realize yet what the changes actually mean.

As things trickle through and the buyer numbers drop slightly I think more opportunities will present. More stock on market, more selection choice, and fewer competing buyers.

At least, that is what I am hoping for.

Blacky

 

Spot On. Anyone going out now trying to grab a bargain is naive IMO. Things take time to happen and don't forget OO is only getting more attractive meaning your dealing with emotional buyers with more cash to splash.

 

No if you are cashing out of a market that is nearing it's peak and moving your funds to a market that is just starting it's recovery... could be a great opportunity.

 

Depends. If you sell you'll be paying 25% capital gain tax + 2% agent fees and if you buy another one that's 5% stamp duty + legal...
So you're losing so much

 

Not sure where you pulled 25% from, but I'll play along... after a market peaks, it could be 5 to 10 years before I see any decent capital growth. On the other hand, moving my capital to a market that is in recovery, I could see very strong capital growth in the next 5 years. If I don't move my capital, I will be losing so much.

 

From The Hudson Institute

The regulators have put the following conditions in place:

• Investment housing loans are not to grow any faster than 10 per cent per annum.
  
• Lenders should use an interest rate buffer of at least 2 percentage points above current rates when testing serviceability.
  
• The serviceability test should use a minimum interest rate floor of 7 per cent to decrease the risk of default.
  
• APRA will be monitoring high loan to value ratios, high loan to income ratios, interest only loans to owner occupiers and very long home loans.
  
• Banks are to increase average mortgage risk weights from about 16 per cent to at least 25 per cent.
  

 

The funny thing is this APRA stuff has been made public since last year. Has anybody been paying attention? Of course not, many were living in the La La Land of Rainbow Unicorns and Lollipops.

 

Depend on your strategy. I won't say it's wrong. But I do like buy and hold rather than gambling to an unknown.

 

Quote of the day - I agree 100%

If your serviceability was reasonably tight a few months ago , your portfolio LVR was hovering around 80% or above and you don't have a large cash buffer....you're going to have a hard time getting additional funding in the current environment.

Cheers

Jamie

 

Its all swings and round abouts. Smoke and mirrors.

There will be a blip in the radar for a bit, and then when things settle down and the media find something more interesting to post about we will all get used to the 'new normal'.
Any impact wont be felt for a few months. But lets face it, something had to be done.
The housing market (essp

 

And what about rent. With less property investment surely rents will rise. Personally, I hope they double. Or triple. APRA can then go sit on it!

 

I mentioned it before but I do believe the greatest losers in all these changes are those unable to afford a home loan. The investors they are trying to halt will likely lead to hiking rents to offset the investment loan increases. The LVR and equity release changes will slow investor buying and likely decrease prices in the next 6-12 and will allow those who can save (decent salaries/couples) to purchase. The downsizers will enjoy not battling with investors and those that cannot afford to buy will only find it harder due to the increased rents.

 

AS someone who sees a diversity of investors I see many who have large portfolio's that these APRA regs dont apply to. The greater impact is those who seek equity release.. The best sign of tight gearing. If you use that term seek broker advice. For equity rich investors its no great issue.

 

Ummm there's a lot of overbuilding going on and the population growth is slowing down. Yields have been sliding.

Good luck raising rents.

 

My point was, people were saying "go to the smaller ones now that the biggies have screwed us up".

Well good luck not being screwed by the smallies as well!

 

And I am not saying you have to sell all your houses either

But I would hate for someone to miss out on a great opportunity because they were thinking about the investment in the wrong way. I will give you a real example.

I had an underperforming unit in Mandurah with no prospect of capital growth over a 5 year timeframe. Conversely, the development potential houses in my area were really starting to heat up. I sold my Mandurah unit for $257,000. In 2011, I bought a development potential house in Cloverdale for $465,000. Earlier this year the bank valued the Cloverdale property at $725,000. The Mandurah unit is back on the market right now for $275,000. Sure it cost me a bit to exit Mandurah and to buy in Cloverdale, but most of those costs are tax deductible at some point. Still, I'm glad I focused on how much I had to "gain" and not how much I would "lose".