Property investment body calls for balanced approach

Property investment body calls for balanced approach

Posted on Monday, August 03 2015 at 11:03 AM

The Property Investment Professionals of Australia (PIPA) has questioned the move by lenders to increase interest rates to both new and existing property investors, urging regulators and government to take a more balanced approach in working to encourage a sustainable and flourishing property market.

PIPA chair Ben Kingsley
says increasing interest rates for existing investors appears to be an
opportunistic move by banks that could have potentially harmful flow-on effects
to the broader property market.

“Increasing
borrowing costs for investors, and in some cases owner-occupiers, who bought
into the market some time ago seems unfair and detracts from what should be the
common goal of creating a balanced property market,” Kingsley says.

PIPA believes more
targeted measures to slow new investor lending, such as decreasing and
restricting borrowing power for new investors in locations where the market is
particularly heated, could be a better approach.

“Above all, the
industry needs to be united in slowing investor activity in some markets. While
PIPA fully supports responsible lending, we believe going forward APRA [the
Australian Prudential Regulation Authority] should take a more transparent
approach, rather than continue its current closed-door tactics.”

According to
Kingsley, APRA’s pressure tactics to force individual lenders to lock out
investors, or increase interest rates, have raised both concerns and question
marks for the industry.

“While real estate
can absolutely be a powerful investment class, people must recognise that not
every property in every market will deliver appropriate returns, and in a
heated market, the odds are really against you.

“PIPA is urging the
government and regulators to join forces and open this debate to the broader
industry. Let us all contribute to this discussion and invest in measures that
will create a more balanced property market for the long-term, and strengthen
this invaluable component of our economy,” he says.

As the peak body for
the property investment industry, PIPA has long campaigned for greater
education around property investment as well as regulation of property
investment advice.

“PIPA remains dedicated to supporting a healthy, sustainable property
investment industry, where education and appropriate regulation come together
to support good outcomes for all stakeholders involved,” Kingsley concludes. 

 

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