CBA restricts property investors

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CBA tightens screws on lending | Herald Sun

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The past should not be used naively to predict the future
Some of my wayward thoughts are kept at http://ozhouse.invisionplus.net

Wow - that's a significant tightening.

90-80% is a huge reduction in the LVR. It has cascading affects on the investor's ROE too (less negative gearing, more capital appreciation required).

The property spruikers will not like this - "it will hasten the shortage" - even though most of the lending goes to re-purchase existing housing stock....

This could have ramifications we don't even know about....

Thanks for the link Nomad - I didn't find this on my normal "news" search this morning..

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Its not whether you are right or wrong that matters, but how much money you make when you're right and how much you don't lose when you're wrong - 

 George Soros.
www.empireinvesting.com.au

No changes to LVRs for regular property buyers and investors.

The changes seem to be aimed at developers and people who invest in shares.

Which means less supply of houses, and less people investing in shares.

Therefore more people investing in existing houses instead?

Fewer investors vying for houses means lower prices. Period.

__________________
The past should not be used naively to predict the future
Some of my wayward thoughts are kept at http://ozhouse.invisionplus.net

I must have missed the bit about property develepors and shares. I thought it said 'personal investment'

The banks smell something...

The the government stepping back from assuring deposits, it's leaving the lenders exposed.

The RBA is moving on rates and the population are not heeding the message to control their debt consumption.

The Banks are right to move like this, it's just a case of too little, too late though. They're doomed no matter which way they look at it - far too much toxic debt out there at the moment on super heated assets.

Shutting down the speculation means the market has a good chance of catastrophic failure, especially in combination with the current RBA agenda of pumping up the rates.

If people panic and look to sell, it will get very messy.


brb - getting popcorn.

The banks smell risk maybe

Too little too late if that is there plan. But I'm only speculating.

Cheers

Justin

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Economics in a Nutshell: Sure, it works in practice, but does it work in theory?

Need a cheap line of credit for that speculation?

Was in CBA today negotiating with some cash that appeared in my account (TD just matured). The cash was bigger than my homeloan remaining.

The clerk asked, 'did you want to pay off your mortgage?'

He seemed well-trained, was he trained to ask this?
If so, why would he be?

I told him he can leave the mortgage as-is as the tenant and inflation are working at it just fine.. and besides, I told him I can get more for my cash (6.8%TD) than they charge me (I dunno, maybe 6.3% or something)

Um, I honestly think I'm reading into one insignificant moment.
But just putting it out there.

Thanks Nomad. That's great news. Just need the other majors to follow suit (Westpac already at 87% for home loans) and the cat will be amongst the pigeons.

It may well be time to throw sand on the wheels of my search. I sense things have accelerated so insanely in the last 6 months that we may be reaching a tipping point sooner than we could have hoped for. Any major economic shocks could tip it. It feels a bit like the eye of the storm at the moment. Not much bad news out there, stock market up 9 days straight, property continuing to rise............hmmmmmmm.......I sense all is not right in the State of Rome.

As long as the foreign investors can make up the local shortfall though, we are still in danger of a a ponzi scheme that may last longer than we do.

And renters are continuing to suck up the rises too. (Anecdotal I know) but I have a mate who just signed to share a standard 2 bedder in Pyrmont for $750/week total. Don't know the area that well but he assures me rents have spiked there in recent times.

Peace

Sydneyside Bear