The banks lift up their games, is it a good time to buy more IPs? Is the price going to fall?

With the recent news from the bank, will the property price keep going up or is it going to fall?

I am ready to purchase another IP at any time when I see the right property, but do you think I should jump in or do I wait and see how the market react to the bank interest rate increase?

 

Its definitely going to effect demand for properties as not many investors will be able to buy in addition the tightening up of non resident buyers will also have a big effect.

 

Filtering out investors by having tighter lending and servicability calculators is good for home owners. I think prices will soften given those left to lend to will exclude the 2+ IP investors may not have huge amounts in their offsets or buffers from refinances in past years to throw at properties.

Maybe prices will plateau generally, units go backwards but housing stock should hold steady.

No stats to back me up, just gut feels

 

It will come down to stock and supply. If people stop buying and more stock comes onto the market then we go from little stock to over supply and this does impact on end values because there is choice and competition and not enough buyers, then prices fall back.

 

It is a lot of unsure. I rung HSBC yesterday and asked if they will accept new IPs home loan. They said they won't receive any new applications from new customers for refinance and IP home loan. But they may after 2-3 months.

Anything going to happen after 2-3 months, why they may open the door for the new investors?

 

Maybe they reached their APRA induced 10% limit on their investor loans and that resets in 3 month time?!

 

It doesn't reset in so much as they wait it out until their average growth rate reduces back below the 10% cap.

In terms of APRA causing a crash/price reductions I don't think so. The regulations in terms of cap limit puts an upper limit on how much credit expansion can happen - but it still allows for significant yearly growth in the overall debt. What I think it will cause more of is limiting runoff growth over short periods of time.

As interest rates rise this will put pressure on cash flow and investors will become more and more aware of their effective yields and whether they want to speculate on very low yielding investments.

 

I kind of like it. It used to be 40 groups compete 1 property, maybe now it is 20 groups. Less competition, as long as the property price don't fall.

 

It really does depend on the market you're playing in too - these distortions can actually lead to increased interest lower value cash flow properties etc.

Likewise if you play in the more emotionally driven mid-high end of owner occ style properties, the surges are still rife as the average PPOR buyer has had a far smaller adjustment to their borrowing capacities.