I get really sad when people tell me “there are no more good deals left”… because what they really want to say is…“I can’t afford the good deals”
If you have ever felt that you’re being forced out of the property game – you’re not alone.
In fact, the Australian Prudential Regulation Authority (APRA) have just passed some changes that will force many investors to seek a new career.
- Lenders are modifying their serviceability calculators to reflect interest rate increase, especially for investment loans and interest-only loans
- “Backbook repricing” has started (which means if you have an existing loan it could have already increased retrospectively as much as .8%)
- Harsh limitations on interest-only loans with a high LVR (loan-to-valuation ratio)
- A 3.5% interest rate buffer when a borrower is applying for a secondary loan
- Sensitising rental income to 70-80% of the actual rent being collected (meaning you’ll need more cash than ever to make a rental deal stack up)
And other parameters are being applied to reduce the bank’s exposure even further, with more to come moving forward.
What this means is…