From 1 January this year, APRA will remove its 30 per cent limit on interest-only residential mortgage lending for banks and other lenders.
This cap was originally put in place in March 2017 in a bid to reinforce sound lending practices, and has resulted in a cooling down of the interest-only lending market and a slow down in the property market.
According to APRA, the introduction of the benchmark has led to a marked reduction in the proportion of new interest-only lending, which is now significantly below the 30 per cent threshold.
What does this mean for property investors?
In short, this move opens up opportunity and competition in the lending market for property investors in 2019, and may signal a start of a return to the property market by investors and the bottoming out of the recent property price adjustment.
