HOME > BLOG > Home Loan Advice > Lending changes give owners an upper hand

It seems like owner occupiers may have a slight upper hand in the property market thanks to the recent investor lending changes.

In order to slow down investor lending, late last year the Australian Prudential Regulation Authority (APRA) imposed a limit of 10 per cent growth per year for investor loans.

As a result, over the past couple of months some lenders have implemented capped LVRs, higher interest rates and stricter guidelines for investors applying for a home loan and also offering owner occupier borrower’s competitive deals in order to even out the playing field.

RateCity’s banking analyst Peter Arnold believes that these changes mean owning and living in your own home may have just become a little easier.

“Almost half of all lenders have introduced two streams of interest rates – with differences as high as 0.85 percentage points. That might not seem like much right now but 30 years down the track it can translate into thousands of dollars,” he said.

It does appear that these changes are starting to have an effect on lending figures with the Bureau of Statistics housing finance data for August showing that the value of loan approvals for owner-occupiers grew 6.1 per cent over the month, while the value of loans to investors fell 0.4 per cent.

According to BT's chief economist Chris Caton "The August lending data suggest that there is still a good deal of heat in the housing sector, but that the owner occupiers are now driving the market.”

With the RBA keeping the cash rate on hold at a record low of 2 per cent and many lenders offering competitive home loan options, now is a great time for owner occupiers to consider entering the market. With investor lending being more closely monitored, it may also mean that there will be less competition out in the property market and it could be your chance to swoop in and scoop up a property quickly.

However, it is extremely important to be financially ready before you go house hunting. A pre-approval is an important tool to have before making an offer on a property. Often real estate agents will ask if you have pre approval to demonstrate to vendors that you are a serious buyer. Formal pre approval will also allow you to move ahead quickly once your offer is accepted as a lot of the paperwork has been completed.

To get a quick indication of whether the property you are looking at is affordable try the State Custodians instant online pre-approval. It only takes a few minutes and gives you an instant result on-screen and an email confirmation of the details - perfect for when you’re out and about.

At State Custodians, we work hard to find solutions for borrowers. If you are an owner occupier or an investor and need assistance, State Custodians can help. Give our expert Lending Specialist team a call on 13 72 62 or leave your details here and they will contact you.