Banks are becoming less free and easy with their investor home loans, and that could cool the property market a little and give the RBA less reason to lift interest rates.
Many banks, including the big four, have tightened their guidelines for lending to housing investors, either making loans tougher to get or more expensive.
In a report on Tuesday, ANZ Bank economists David Cannington and Felicity Emmett say it is difficult to calculate exactly how much these changes will affect the supply of mortgages.
But the new approach will take a bit of the shine off the housing market.
"The changes to investor housing lending practices are likely to have a marginal softening impact on housing sales and price growth, and as such will give the Reserve Bank some breathing space to keep rates low to support a broadening of the non-mining recovery beyond housing," they said.
The shift in attitude among the banks may have resulted from their own decision to slow their lending to investors.
But it's more likely a response to a move by the Australian Prudential Regulation Authority to hose down speculative housing investment, the ANZ economists say.
APRA wrote to lenders in early December warning lenders not to increase investor loans by more than 10 per cent a year.
The changes have been welcomed by credit ratings agency Moody's.
"In our view, these initiatives are credit positive since they reduce the banks' exposure to a higher-risk loan segment," Moody's executive Ilya Serov said as he launched a report on the implications of the changes made by the banks.
Recent figures suggested banks had already acted to slow their investor housing loan growth to below APRA's speed limit.
Figures released by APRA on Tuesday showed the value of investor housing debt rose by 12.4 per cent to just over $450 billion in the year to March.
But the RBA's seasonally-adjusted measure shows growth slowed to an annualised pace of 10 per cent over the first three months of this year, right on APRA's line in the sand.
"The additional lending constraints are likely to slow down investment lending further," Mr Serov said.
BIG BANKS' CHANGES TO INVESTOR LOANS
*ANZ
- No interest rate discount for new property investors without an ANZ owner-occupier loan
*COMMONWEALTH BANK
- 80pct loan-to-valuation cap for investor loans (Bankwest)
- Reduced rate discount for new investors
- Removed $1,000 rebate for new investors
*NAB
- Reduced rate discount for new investors
- Exited investment lending to self-managed super funds
WESTPAC
- Reduced rate discount for new investors
- Stricter loan criteria for 'non-resident' home lending
(Source: Moody's)
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