APRA hints at credit easing for investors ‘sooner rather than later’

Speaking specifically, APRA chairman Wayne Byres said that the 10 per cent investor growth benchmark imposed on lenders in December 2014 is “becoming redundant”.

While warning that it’s difficult to predict the future, and as such caution needs to be heeded, the chairman considers APRA to be in a position where “that could be removed sooner rather than later”.

However, the additional cap on interest-only lending, requiring lenders to keep interest-only borrowers to 30 per cent of their loan books, is less likely to be softened in the near future.

“The industry and the market are still settling. I wouldn’t foreshadow removing that in the short term, but, obviously, we watch and see how the markets evolve,” Mr Byres said of the policy introduced in March last year.

“The 10 [per cent policy] and the 30 [per cent policy] are definitely intended to be temporary as we have better lending standards, as the government has now mandated comprehensive credit reporting and the major banks at least have got a firm deadline in which they need to be contributing that data and making it available and then as the new capital standards come into force.

“When we have those three — in a sense — structural pieces in place, we won’t need the temporary pieces anymore.”