The Australian Prudential and Regulation Authority (APRA) announced in late April plans to remove the investor loan growth benchmark which it set at 10 per cent in 2014, reports Your Investment Property magazine.
The cap was intended to be a temporary measure to reduce higher risk lending, particularly during a time of heightened investor-fuelled property market growth.
“The temporary benchmark on investor loan growth has served its purpose,” said APRA Chairman Wayne Byres.
“Lending growth has moderated, standards have been lifted and oversight has improved.”
The 10 per cent cap will be removed from 1 July 2018 for banks that confirm their investor lending practices have remained within the APRA cap and their policies and practices meet APRA’s guidelines.
As any good regulator will, APRA has issued a notice that it will continue to closely monitor investor lending to ensure standards don’t slip. And the 30 per cent benchmark for interest-only lending will continue to apply.