Loans

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Philip Lowe, the RBA Governor, has indicated the central bank's primary concern is employment, and those who don’t have a job and whose wages aren’t growing at sufficiently high rates. 

"So to the extent that anything keeps me awake at night, that’s what worries me is the social and economic cost from a protracted period of unemployment. 

"We know that low interest rates do push up asset prices, that’s part of the transmission mechanism. 

"What would concern me, if we saw on the back of these rising asset prices, lending standards deteriorate and people go into the bank and borrowing ridiculous amounts of money in a speculative boom. 

[smartcode_project:default project_id=29660]

"So this is why our focus is very much on making sure these lending standards remain sound because that would be a big problem if we saw a debt financed speculative boom in asset prices. 

"We are not seeing that at the moment. 

"The equity market is below its previous peaks, housing prices in Sydney and Melbourne, while they’re rising, they’re not really higher than they got to a little while back in some of the smaller capital cities. 

[smartcode_project:default project_id=4939]

"In regional Australia housing prices are rising quickly, but there are fundamental factors at work here. 

"So the issue is if prices are rising, are people borrowing responsibly and carefully? 

"And to date they are," Philip Lowe concluded.

Lowe also warned that looser lending standards would increase the upward pressure on house prices and create financial risks.

“We are not at this point, but we are watching carefully,” he said.
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The RBA Governor Philip Lowe has said he would be worried if Australians started “borrowing ridiculous amounts of money” in a speculative way.



jchancellor

Don't borrow ridiculous amounts of money: RBA Governor's warning to home buyers

<html><body>Non-bank funders are looking to lend to apartment developers whose project starts were stalled across Melbourne during the pandemic.

"We are seeing the savvy developers doing what they can now to get their projects moving," Wingate managing director (property) Mark Harrison told Nine Entertainment.

But Harrison confirmed "a real distinction" between investor and owner-occupied product.

"The owner-occupier market is quite strong and we are funding quite a bit through the middle and inner-ring suburbs, driven by downsizers and people making lifestyle choices."

The big banks are mostly absent from the market, given their policies on pre-sales.

Pallas Capital chief investment officer Dan Gallen noted the banks often still had a requirement for onerously high levels of pre-sales.

"The banks have not moved with the times," Mr Gallen said.

"Developers are left in purgatory," he added.

Pallas Capital has extended $700 million of apartments across the major capital cities over the last three years, mostly via first mortgages, targeting upmarket developments in suburbs Malvern and Brighton in Melbourne.

"The market is certainly there, especially in the owner-occupier space," Mr Gallen said.

"We have had $150 million of loans repaid in the last three months from developers able to sell product."

The article noted MaxCap Group founder Brae Sokolski indicating its client developers were taking a position on the demand picture in 2022 and 2023.

"If net migration returns, we feel there will be a chronic housing shortage that will work in favour of developers with completed projects."

Sokolski noted funding conditions were especially working in favour of inner-city boutique developments, led by owner-occupiers.

MaxCap is backing the $45 million One Wilson Avenue project in Brunswick, consisting of 41 apartments being developed by Neometro and Milieu.</body></html>

Pallas Capital has had $150 million of loans repaid in the last three months from developers able to sell apartments

Non-bank lenders triggering apartment project restarts across Melbourne

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GUEST OBSERVER
The Macquarie dictionary explains collateral as, “Security pledged for the payment of a loan” and to cross-collateralise is to pledge multiple securities for the payment of a loan or loans.
An Example :
1. Property A is owned by Person A
2. Person A wishes to buy Property B but has no money for deposit.
3. Person A buys Property B with 100 percent loan and the Bank holds Property A and Property B as security against loan for Property B. Property A &amp; B are said to be cross-collateralised.
In 95 percent of cases cross-collateralising is not beneficial to the borrower, it favours the bank, cross-collateralisation isn’t a problem until it becomes a problem, and then untangling it can be a long, expensive and traumatising experience. People loose fortunes both in real time, money and opportunities as a result of cross-collateralised structures.
Ten disadvantages of Cross-Collateralising your property portfolio…
#1. When you sell a property in a cross-collateralised structure you may not see any of the funds as the bank may request some or all of it to go back in against the existing loans to strengthen their position. They don’t need your permission either. Picture this you’re releasing one of your properties for an opportunity or worse still a bind, and the bank deducts funds to strengthen their position. Where would that leave you? I have seen this happen to some very asset strong and successful property investors. Answer given, Bank Policy!
#2. When you sell a property you have to resign all of the existing mortgages. Extra unnecessary paperwork.
#3. You can loose product selection and control by being with just the one bank. For example the bank can say no more interest only loans for you, we want you to take a Principle and Interest loan from now on, to reduce your debt with us. This is quite common when your borrowing levels get up with the one funder. 
#4. Bank holds far more security than often necessary, for example Property A worth $800 000 is used to buy property B for $250000. The bank has $1 050 000 of assets against $250k of loans. The result is that the bank holds all of your cards.
#5. Buying across state boarders you are subject to mortgage document stamp duty of that state, this in itself is OK, but when you have other properties as security for the purchase, regardless of the state they are in you may have to pay the mortgage document stamp duty on the entire loan amount, rather than just on your purchase price. For example, purchase property A worth $300,000 in QLD but for whatever reason you have offered another property as security and it is worth $500,000 in the ACT, you would have to pay mortgage document stamp duty on the whole portfolio of $800,000 and this is because the entire mortgage document has to be stamped in QLD. 
This duty is a state duty and is different in every state or territory. An example of the difference in the amount payable can be, where the stamp duty is $4 in a thousand, for the cross-collateralised mortgage document stamp duty you are up for approximately $3,200, but if you had your purchase as a ‘stand alone’ loan you will have to pay approximately $1,200 . If you need to find out more about this point, please give us a call.
#6. Having at least two lenders gives you the flexibility of playing one off against the other, giving you more choice an ultimately more control.
#7. If you want to realise some increased equity when properties have grown in value you need to have your whole portfolio revalued (multiple valuations instead of one, again an additional and unnecessary cost).
#8. You can run out of borrowing capacity with one lender when you reach their maximum serviceability / exposure levels.
#9. It is so much harder to move banks, if you no longer like or agree with their service or lack of. 
#10. If you have cashflow problems, your whole portfolio is at risk. Better risk management from your respect is to not cross.
There are numerous more reasons why not to cross-collateralise, especially if you have a business with Overdrafts / partners / Fixed and Floating Charges etc, there are also simple ways to combat the banks having too much security with financial instruments like Deposits under Lien and secondary funders. An experienced Mortgage/Finance broker can help you with structuring advice specific to your own needs, and keep you in control of your assets.
 
Peter Tersteeg is mortgage broker, Sage Lending Solutions and can be <a href="https://www.sagelending.com.au" target="_blank">contacted here</a>.
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jchancellor-FAypfDUnLy

Property 101: Cross-collateral loans

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In an interesting take on APRA’s directives, the banks are pricing investment loans to be more expensive than ’owner-occupied’ home loans, for new and existing home loans.
There may be some contention as to what category your loan falls under. Did you borrow against your home to invest ? How about if only 50% of your loan relates to an investment property? What if your home and your investment property were cross-collateralised?
With this interest rate disparity, it’s ever more important to get your lending structure spot-on. Tailored advice is now paramount given there are ways to ensure you are getting the best rate available.  
For starters, having your home loan and investment loan at the same bank is now necessary unless you want to get slugged on the carded rate.
If you took out an investment loan to buy a property, which you have since moved into as your home, your broker should have been in touch with you by now regarding the suitability of asking the bank to re-classify your loan. Should it be appropriate, I reckon do it now before the mad rush in a couple of weeks. We have done our homework in advance - each bank will deal with this request differently.
So here are the new Standard Variable Rates. There’s not much difference in movement amongst the majors (not that I’m suggesting any opportunistic collusion). Hey, at least we can all be thankful that we all own part of the banks through our superfunds...
ANZ (Owner Occd): 5.38% (CR 5.49%)*
ANZ (Investment): 5.75% (CR 5.49%)*
CBA (Owner Occd): 5.45% (CR 5.59%)*
CBA (Investment): 5.86% (CR 5.86%)*
NAB (Owner Occd): 5.43% (CR 5.52%)*
NAB (Investment): 5.72% (CR 5.63%)*
WBC (Owner Occd): 5.48% (CR 5.62%)*
WBC (Investment): 5.89% (CR 5.89%)*
 * CR is the Comparison Rate. It is a notional rate which includes fees (mainly the annual package fee of around $395) into the interest rate in well-intentioned yet child-like attempt to come up with a single rate which punters can use to estimate the true cost of a loan. It is based on a $150,000 mortgage and hence does not at all relate to you unless your mortgage is exactly $150,000 and you never use your offset account or Credit Card interest free terms
The Standard Variable Rates are of course lacking meaning without applying your lifetime discount. One bank might be giving you a 1% discount off this headline rate (that discount is so 2011), whilst a broker may negotiate an unpublished cracking lifetime discount of 1.45%. 
You must always consider the upfront costs, ongoing fees and the ’after discount’ interest rate; then compare the loan products over a certain time frame (please don’t compare over 30 years, perhaps this is unrealistic). 
We think a 10-year projection is appropriate, that way it’s also easy to divide by 10 to see the annual $ saving.
Product Comparison – 10 Year Projection 
<a href="/images/2015/08/14/Screen%20Shot%202015-08-14%20at%204.52.53%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/08/14/Screen%20Shot%202015-08-14%20at%204.52.53%20PM.png" alt="">
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 Jason Khoury is the principal at iChoice. He can be contacted <a href="mailto:jason@ichoice.com.au" target="_blank">here</a>.
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An interesting take on APRA’s directives: Jason Khoury

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GUEST OBSERVER
The March housing finance approvals came in largely in line with expectations, with essentially steady owner occupier activity and a slight firming in the value of investor loans.
The number of owner occupier finance approvals dipped 0.9 percent mth in line with Westpac’s –1 percent call. Ex refi, the number of ‘new loans’ was a bit softer, down 1.6 percent mth.
Note that the abrupt slowdown in Australia’s housing markets in the second half of last year was mainly driven by a rapid cooling in investor activity following a tightening in credit conditions and rates for investor loans in response to a tightening in prudential guidelines and increased capital targets from regulators. Owner occupier activity was a lot steadier through this period with the number of loans still growth in annual terms, up 3.8 percent yr.
Accordingly there continues to be more focus on the investor lending numbers in the finance approvals data. Although these are not included in the headline figure on the number of approvals, the value of investor loans is recorded and included in estimates of the 'total value' of housing loans. For March the value of investor loans was up 1.5 percent mth after a 3.1 percent gain in February.
Though still down 13 percent yr, investor activity has clearly firmed a touch in early 2016. This may account for the firmer tone in other housing market indicators such as auction clearance rates and price growth. Buyer sentiment lifted following the RBA's rate cut in May but remains at a subdued level compared to previous years. Notably, the pick up in price growth in April appears to have accelerated in May with the month to date figures from CoreLogic RP Data showing surprisingly strong gains.
Elsewhere in the finance approvals detail, construction-related finance approvals were again weak, down 5.9 percent mth and 11.7 percent over the last 3mths. Within this segment, finance approvals for the purchase of newly built dwellings, which covers owner occupier purchases of 'off the plan' units, are down 11.1 percent mth and 23 percent since Dec. Although this could reflect shifts in demand it may also be an indication that buyers of 'off the plan' units more broadly are starting to encounter financing difficulties.
Approvals were a mixed bag by state. Owner occupier approvals ex refi were down across the board but showed slightly bigger falls in NSW (–2.2 percent), Vic (–2.7 percent) and Qld (–2.5 percent). Note that only owner occupier state figures are available at this stage with investor data due out May 13.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Australian housing finance March 2016: Matthew Hassan

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<img src="/images/2015/06/25/Holdencapital_banner.jpg" alt="">
SPONSORED POST
Nine reasons why developers fail to secure finance quickly or at all
1.     You expect banks/lenders to fund your project.
Whilst banks and lenders generally have clearly defined policies outlining what they can and cannot do, it is not automatic that just because your loan fits within their policy that they will fund it. This is particularly true in the current market with the volume of sound projects that we are seeing since the residential markets picked up in 2014. Lenders are being more selective and do not have to fund every project that lands on their desk, so It is imperative to present your project in the right way to motivate the lender to do the deal from the start, even after they hear about the 1 or 2 leniencies you might require or those boundaries that HCAP as your advisor are pushing to get you a better deal. Remember, approval is not automatic, we need to create a desire by the lender to be a part of your deal
2.     You negotiate terms before giving the lender the chance to understand the deal.
Similarly, it is understandable that everyone wants a good deal on finance, but starting the finance discussion by asking for or even dictating the terms you want before we or the lender know anything about your project or your capabilities to deliver it, is a fast road to disappointment. Borrowers with this approach have a long road in front of them to reach their destination. Any financier/broker/real-estate-agent can over-promise and under-deliver, and for some people that matches perfectly because they just want to be told what they want to hear. Smart developers are patient and understand that by firstly explaining their motivations and background and then providing the transaction details, including all the pros and cons (and their means of dealing with them), provides us with a reason to want to do the deal. Once this is established, we are motivated to provide competitively priced terms that reflect the relevant risks and meet the required timeframes. This then allows you to get on site quickly and do what you do what you hopefully do best, develop properties. So, explain first, ask later.
3.     You don’t have a genuine reason why you are doing the project.
As Henry Ford said “A business that only makes money, is a poor business”. Doing a project just because you out-bid a bunch of other developers to win it or because you own it and think it’s a good idea is not a reason of itself. Regardless of the state of the market cycle, site selection strategy differentiates the elite from the amateur developers. It is surprising how many developers base their acquisition strategy on being “friendly” with a few agents. Being close to the top of an agents speed dial list isn’t the sustainable business model a financier wants to hear. The elite developer identifies his target locations based on researching the demand supply due diligence he undertakes. They then scour the area (some literally go door to door having cups of tea) to capitalise on opportunities because to succeed they know that they need to understand the better sized lots on which to fit the best number of product per square metre of land; the neighbourhood plan and what they can push council for relaxations on; what the marketers can achieve in terms of sales rate per month from launch and all the other key issues that will ensure a viable project. Essentially, living and breathing a location and knowing where you can push and pull the boundaries to make a project to stack is the key. These smarter developers wear their ‘why’ on their sleeve and you can see it in the way they approach their business. These guys lead the market while the rest follow and some get left behind. Be strategic and have purpose if you want to be successful.
4.     There are gaps in your capability to deliver the deal but “you will find a way”.
Developers who have this problem, which can be financial or capabilities, fall into two categories; those who know it and are looking for someone else to solve their problems; and those that don’t. Whilst it can be admirable to see these people invest heavily in a project, it is also a concern. Frankly, those that don’t know they have a problem often never get it and like many things in this world, you can’t change them no matter how hard you try, so best to walk away. But for those who do understand their deficiencies there can be a solution if they are willing to listen and adapt. The secret is, understanding what you can do and being prepared to let others do what you cant. It is this second part, which is the hardest because it usually means that you have to give something up and that usually comes at a cost and can be both financial and some cases, control. This is probably the hardest process to undertake and the one that most often results in costly mistakes, by all concerned. To get the deal done, all parties concerned need to understand their strengths and weakness’ and be prepared to compromise to achieve a positive result. Quite often 50% of something is better than 100% of nothing.
5.     Can you control the key delivery elements of the project? 
An often seen issue is the inability for developers to recognise that they don’t have all the requisite skills to complete a project “in-house”. Property development is a complex process that requires many skill sets and even the elite developers know when to hire in the right professionals to help them out. Often a developer will try and bolt on skill sets to bolster their capabilities which is great, but having someone apply their time/service on an “all care no responsibility” basis is higher risk for you as the developer and us as a lender/investor in your project. As a lender/investor, we would much rather see you try and get their interests aligned with yours. Nearly all consultants will offer their time for a fixed fee or a per month rate, but if their services are a critical part of your delivery process why not incentivise them to the end objective which is a completed and profitable project? As an example, rather than paying $10k/month for 18 months ($180k), why not $6k/month ($108k) and a $120k performance bonus payable when there are surplus sales proceeds after repayment of the project debt. This ensures that person/company is very motivated to see the overall project succeed and is tied to the ultimate goal, which is profit. If an external party is critical to the project success, try to align their interests with yours.
6.     A one-page feasibility is not a “Finance Application” end of topic, just don’t do it. Ever.
7.     You’re not crunching your numbers over and over and over again.
Elite property developers constantly crunch their numbers over and over again to be sure they are not missing anything. They acquire or construct their own spreadsheets that allow them to continually refine price points, costs and timeframes as they gather more and more due diligence about these elements of their deal and they never stop the process. When asked questions about these elements, they have a good grip on their base case as well as optimistic and worst case results. Those who struggle often can’t tell you their break-even point per product, their cash flow requirements from now until project settlement, or marketing aspects like cost per lead and conversion rates to unconditional presale. If you want to impress us and the lender. Know your numbers.
8.     You don’t have a strategic and sustainable business model.
In addition to seeing that you have a purpose, a financier wants to see your business plan. It’s not all just about the one deal. Yes, sometimes a project is a once off because an owner decides to redevelop a site, but these are few and far between. In most cases you are intending to undertake multiple transactions and the lender wants to understand your ability to maintain sustainable flow of profitable transactions. So, what will you do for the next 18-24 months until that last apartment is sold and you have seed money again? How does your business grow? Cash is oxygen to any business and a lack of it limits growth potential. Developers often have A&amp;L statements showing all their capital invested in two or three projects and they can’t do another project until all the stars align and they get their money back from their current workload. What they also need to see is a carefully considered group cash flow that demonstrates how you are using your capital strategically and that you can do another project within the window of the current market cycle (maybe partner with a capital provider like Queen Street Invest). Again, show you have purpose, are a sustainable player and not a one-project wonder.
9.     Underprepared marketing and sales strategy.
Probably the single most common mistake we see from developers is a failure to understand the importance of and difference between marketing and sales and how to use the right resources. It doesn’t matter that you have secured the best team of professionals such as town planner, architect, builder and other technical support, if you don’t know how to tell the market about your product and you don’t have a team of skilled negotiators to secure sales, you can’t make a profit other than by accident! Time and again we see a blind faith in the reliance on local agents or ill-conceived marketing strategies that results in a failure to meet everyone’s expectations, often with catastrophic results. Remember, you don’t make a profit until the final sales are sold and settled. The secret is to do your homework and appoint professionals based on their proven expertise. As noted earlier, ensure that they are properly incentivised and that their remuneration is tied to the project profit! Don’t be afraid to spend money on marketing and sales, understand the difference, how and when to use them and why they are the key to delivering your profit.
To find out more about which option best suits your next project, contact Dan Holden at HoldenCAPITAL on 0401 669 502 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au/" target="_blank">here</a>.
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Nine reasons why developers fail to secure finance quickly or at all: Holden CAPITAL 

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<div>APRA's crackdown has skimmed skimmed the high LVR property investors out of the market, but there still exists a relatively high level of demand for investor credit from those with the requisite serviceability that remain. </div>
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<div>The ABS Lending Finance data series for February 2016 showed total lending finance across all measured sectors rebounding nicely in February, but against an underlying downtrend.</div>
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<div>That's in part due to the APRA effect, which has effectively stymied the outlandish surge in property investment demand. </div>
<a href="/images/2016/04/19/B4.jpg" target="_blank">Click to enlarge</a> <img src="/images/2016/04/19/B4.jpg" alt="">
 
<div>Breaking out the data into its component parts and using the smoother trend figures we can see that despite a solid rebound in February commercial lending has apparently lost some of its momentum, which is potentially underwhelming news for business. Of course, from month to month the underlying business lending figures are lumpy, and there's no getting away from that.  But for the moment, at least, the trend appears to be softening.</div>
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<div><a href="/images/2016/04/19/B5.jpg" target="_blank">Click to enlarge</a></div>
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<div>The figures for personal finance at first blush appear to be almost comically soft, declining to levels last seen in 2007.  However, I do wonder about classification issues here, given the massive and increasing popularity of mortgage buffers, offset accounts, and redraw facilities. Not really sure about this, but it looks muchos weird to me. Let's pass on that one, Magnus!  At the state level, commercial finance in rolling annual terms has been trending up marginally in Queensland, but down in Western Australia. However, the latest figures suggest that WA may have at least arrested its decline.</div>
 <a href="/images/2016/04/19/B6.jpg" target="_blank">Click to enlarge</a> <img src="/images/2016/04/19/B6.jpg" alt="">
<div>Splitting out the commercial finance data by industry it is with no great surprise that we discover with that lending in the mining sector has been obliterated by about a third over the past year to be around 40 per cent below its peak.</div>
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<div><a href="/images/2016/04/19/B3.jpg" target="_blank">Click to enlarge</a></div>
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<div>Fortunately mining is only one part of Australian industry, and other sectors have fared considerably better, with business lending rates tracking at record lows.</div>
 Property investment loans 
<div>Macroprudential tools have been deployed in order to cap property investor credit growth at 10 per cent, while the RBA disclosed some of its <a href="https://www.rba.gov.au/information/foi/disclosure-log/pdf/141515.pdf" target="_blank">thought processes</a> in this regard this week - interesting insights indeed (imagine having your emails disclosed like that in the public domain, by the way!).</div>
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<div>These moves have had the desired effect, and the focus has very much shifted towards owner-occupier lending. </div>
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<div>That said the seasonally adjusted February Housing Finance data showed investment loans rebounding by +4.1 per cent in February to $11.9 billion, so there is still a reasonably high volume of investor activity in the post. </div>
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<div>Indeed, investor loans are steadying across most states in February when looked at in rolling annual terms.  That said, activity in Western Australia was down by 20 per cent in February from the prior year comparative result, so there is possibly still some decline to come there, although a few analysts have already called the market bottom for Perth. </div>
<a href="/images/2016/04/19/B1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/19/B1.jpg" alt="">
 
<div>Investor activity in the Northern Territory has fallen to such a low level at about $46 million per month that it wouldn't even register as a blip on the above chart. The February result was down by 43 percent from one year ago, so the trend line is shaping as if participating in a race to the bottom.</div>
<a href="/images/2016/04/19/B2.jpg" target="_blank"> Click to enlarge</a>
<img src="/images/2016/04/19/B2.jpg" alt="">
 Not looking all that grand for Darwin, tbh!
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 The wrap
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<div>A decent rebound for Lending Finance in February, but there looks to be a softening tending in business finance. </div>
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<div>Monthly investor lending activity looks to be steadying in New South Wales ($4 billion), Victoria ($2.6 billion), and Queensland ($1.5 billion), though there is still some potential softness in evidence elsewhere. With some banks having offered fixed rate home loans as low as 3.99 per cent, anecdotally there was a strong month of owner-occupier lending in March.</div>
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PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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Property investment loans already bottoming out: Pete Wargent

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If APRA enforce’s the assessment of a new mortgage holder’s ability to pay down their mortgage obligations the right way, it would cause a heavy blow to the Australian economy. The base assumption is that mortgage stress starts when more than 30% of household income is used to pay down the mortgage. Most households with new financing are already experiencing this stress at record low rates.
In Australia’s instance, and based on after tax income, households would only be able to borrow 3.64x the household income (unless the household already has other debt commitments) if the 7% servicability rule was to be property enforced. The only way to safely assure that new mortgage holders would be able to absorb 7% interest on a new mortgage is if it is based on the ability of the mortgage holder to manage 7% interest rates after income tax and all other debts taken into considerations have been factored in….unless you allow for dodgy measurements which Australian lenders are good at using.
<img src="/images/2015/05/25/lf_economics.jpg" alt="">As the above figure illustrated, this would mean one heck of deleveraging event in Australia if new borrowers borrow significantly less than the previous borrowers which would break down Australia’s Ponzi household lending business. Had the RBA not taken abnormal measures to save the housing market now on two occasions in the last seven years, Australia would not be in this problem so far down the road. Until then, hardly a shred of chance APRA will act tough. Like it’s associates at the RBA, talk is talk and data is data. And both have been managing a bubble, not an economy. That’s what the data tells us.
Lindsay David is the author of <a href="https://www.amazon.com.au/Australia-Australian-Credit-Property-Bubble-ebook/dp/B00JJ7UW0S/ref=sr_1_1?ie=UTF8&amp;qid=1410612321&amp;sr=8-1&amp;keywords=australia+boom+to+bust" target="_blank">Australia: Boom to Bust</a> and <a href="https://www.amazon.com/Print-Central-Bankers-Lindsay-David-ebook/dp/B00TMHEDBY/ref=sr_1_1?ie=UTF8&amp;qid=1423979661&amp;sr=8-1&amp;keywords=print+the+central+bankers+bubble" target="_blank">Print: The Central Bankers Bubble</a>. David recently founded <a href="https://www.lfeconomics.com" target="_blank">LF Economics</a> and holds an MBA from IMD Business School. He blogs at <a href="https://blog.australiaboomtobust.com" target="_blank">Australia Boom to Bust.</a>
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APRA won't act tough, just talk on property investor lending: Lindsay David

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The Commonwealth Bank of Australia has informed mortgage brokers that new borrowers' existing debts and their incomes are to be assessed more stringently.
CBA will apply a servicing loading of 20% to all repayments on existing home loans and lines of credit held by customers.
The 20 per cent loading means repayments that were assessed at $1000 a month will now be assessed at $1200 a month.
CBA also said it would accept only 80% of income from overtime, bonuses, and investment income when it is assessing home and investment loan applications. 
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<div class="cq-article-content-media section">The maximum loan-to-valuation ratio for all owner-occupied home loan applications would be 95%, compared to currently allowing LVRs of up to 97%, including the cost of mortgage insurance.</div>
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