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An overwhelming number of agents expect to be hurt by the investor lending squeeze – which may soon become even tighter.
An REB poll found that 93.1 per cent of respondents expect the investor lending crackdown to affect their sales volumes – 87.4 per cent significantly and 5.7 per cent marginally.
Alexander Phillips of Phillips Pantzer Donnelley, who placed second in this year's Top 100 Agents ranking, said the crackdown had already affected his business.
“I had a gentleman the other day come out to look to buy something – he had his finance pre-approved, but he had to redo it and he can’t get approval now at that level,” Mr Phillips said.
WBP Property Group chief executive Greville Pabst said the crackdown may reduce demand from first-time investors, but it won’t bring more first home buyers into the market.
Mr Pabst described this crackdown as a delicate balancing act on the part of APRA, the prudential banking regulator.
APRA wants to cool the booming Sydney market and the strong Melbourne market – but it doesn’t want to damage the other capital cities, which are stable or contracting, he said.
SQM Research managing director Louis Christopher forecast that APRA “will likely turn the screws again” once it concluded it was failing to tame Sydney and Melbourne.
“Since the announcement by the major banks of new restrictions [last month], clearance rates have stayed above 80 per cent in Sydney and 75 per cent in Melbourne,” Mr Christopher said.
“On top of this, I am having a strong sense that listings have fallen again from the levels in May.”
Mr Christopher said any enhanced measures would probably be introduced some time this year.
One possible course of action would be for APRA to ask the banks to place tougher restrictions on investor lending.
However, Mr Christopher said APRA was more likely to focus on LVR limits, specifically for Sydney investors.
“Setting such a course for the Sydney market, and perhaps later the Melbourne market, would be optimal for the RBA,” he said.
“It would enable it to keep rates low, if not lower, and would tactically target the problem ‘bubble’ areas.”
[Related: How to survive the next downturn]
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