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Financial regulators united in attack on risky loans – Sydney

Australia’s financial regulators have launched a joint attack on risky home lending as investment and interest-only loans threaten the stability of the financial system.

The Australian Prudential Regulation Authority called an emergency meeting with the nation’s banks to tell them of new speed limits that will prevent them from aggressively pursuing investment property borrowers.

At the same time, the Australian Securities and Investment Commission said it would investigate interest-only loans, which make borrowers highly sensitive to movements in interest rates.

The move could put the brakes on the rampant property markets in Sydney and Melbourne, which have seen house prices rise at a double-digit pace fuelled in part by demand for investment loans.

Read more: http://www.smh.com.au/business/banking-and-finance/financial-regulators-united-in-attack-on-risky-loans-20141209-123jjx.html#ixzz3LOG8T5p0

 

DISCLAIMER: This disclaimer is a requirement of the Securities Industry Legislation Act. The writer of this article is not a practicing lawyer or financier. The information, statements and opinions expressed are intended only as a guide as to some of the important considerations to be taken into account relating to property investment. I strongly suggest that you consult with licensed professionals such as accountants, Lawyers, Valuers, Development Consultants, Quantity Surveyors and others, BEFORE signing any contracts or other binding documents.