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Recent APRA changes to have minimal impact in Perth
Recent APRA changes to have minimal impact in Perth 1 December 2021 Matthew Hughes Matthew Hughes, Managing Director at Capital Property Advisory December 01, 2021 Much has been said about the Australian Prudential Regulation Authority’s (APRA) recent increase in the interest rate buffer banks must use when assessing loan applications. Basically, banks now need to assess borrowers’ ability to meet their loan repayments at an interest rate that is at least 3.0 percentage points above the loan product rate – an increase over the previous rate of 2.5 percentage points. In a financial climate where there is an expectation that household income growth will not keep pace with household credit growth, APRA has assessed the balance of risks and concluded that stronger serviceability standards are required. Its objective is simply to ensure that mortgage lending is conducted on a prudent basis, and that borrowers are well equipped to service their debts under a range of scenarios. But how does this affect our own market here in Perth? Firstly, it is important to note that any impact is likely to affect investors more than owner-occupiers because investors tend to borrow at higher levels of
Matthew Hughes, Managing Director at Capital Property Advisory December 01, 2021 Much has been said… Read Article