Is getting loans going to be harder

It seems that APRA has been putting more pressure on the lenders. Is getting loans going to get harder? Is it a temporary thing? Is it still easy to get loans comparing to the past?

 

Me thinks so.

The other concern is interest rates rising, already started, not sure whether this will put the brakes on Syd and Melb markets??? If investors can not source loans then they cant buy property and we could go from low stock to over supply... boom over

MTR

 

Definitely will get harder.
This will last a long time too.

 

Be interesting to hear from brokers and how it is impacting on clients.

I do know some investors who have now been cut at the knees

 

It will get harder but it actually might get a bit easier with some lenders as rates rise - those lenders that give neg gearing benefits will actually become more generous as rates rise due to the fact they already treat existing debt at 7.25%.

But on the whole, definitely harder than previously.

 

Most could not even afford the level of loans they have now. Many are not even able to tap into equity let alone borrow for another property.

 

What, had no idea it was that bad, scary stuff. Its only a matter of time before markets feel the impact

 

But there are still plenty of people getting loans. The ones with approx 4 or more properties are finding it much harder (unless they are the cheaper properties).

 

Yes it is harder...but you need a balanced approach....6% growth...6% return..still possible to keep buying up to 6-7 properties if you buy well.

 

It's true that many would not qualify for what they have now. But there are still options: add value, increase revenue, pay down debt, strategically sell down (but talk to your broker first!). It's not like hitting borrowing capacity is a new thing. I maxed out in 2011. However, I was recently assessed and have enough capacity for my next project. So it's not like hitting the limit is the end of the road.

That said, limits are more important than in the past so people need to be wise about how they invest to their limit.

 

I do not think the recent tightening (well we know in fact) does not stop growth and their is a pretty basic reasoning IMO.

The people who are feeling the pinch the most are those with larger portfolios. Owner Occupiers and investors with no or single properties still have the capacity to purchase large.
What is the statistic again? Something like 95% of investors ever only own a single property??

So you still have emotional owner occupiers, inexperienced developers and also emotional investors. I say emotional because most investors with a single property are inexperienced and invest with their heart not their head.
All these people still have capacity to service and all of them are still experiencing lowest EVER interest rates even if we did have some recent investment increases.

A tightening of servicing even if you tighten a bit more does not hurt the masses. It hurts the minority and these are hardly a concern when we are talking property booms.

 

Is it getting harder? Sure is - especially if you've already got two or three properties under the belt.

Is it going to get harder? Probably. There's still a few generous lenders out there - but who knows when they'll change policy.

Cheers

Jamie

 

There are still plenty of options. I am compiling a list of ways to increase borrowing capacity and so far I have about 250 different ways.

 

Yes it is certainly possible but it all depends on the person and how they are set up.

I did a planning exercise recently where a young couple could theoretically borrow to buy up to 40 properties still - cheaper high yielding ones. This is where they were each earning $100k and had an unencumbered main residence which could have been used to set up a LOC for deposits.

 

I suppose from now on it's either dual occupancy or development/value add to increase yields. Alternatively, one can look at shares (LICs/ETFs). Otherwise, as Rolf said - just pray .

 

It is possible sash. But sooner rather than later investor will need to consider alternative strategies to move forward. The lending environment is definitely not the same it used to be even a couple of years ago.

I'm personally considering diversifying into shares.

 

We are seeing that banks are needing 3 way cashflow more and more for business clients plus their business plans.

People with out of date financial reports, or reports that do not make sense, are struggling a bit more.

Old school lending.

 

It'll be a good for the debt-lite first home owners to have a better go if lending criteria remains tight. Cutting multi-portfolio investors off at the knees isn't too bad in scenarios when they grow a bit too close to the ceiling fan (or something something). It's a nice forced reflection to look at other asset classes and mix things up.

 

Why not do both?