In late May 2015 the banking regulator (APRA) has tackled the banks in an attempt to curb a rapid expansion in investor lending (and rapidly increasing property prices mainly in NSW and VIC) given 50+ year record low interest rates. In response, the major Australian banks have started increasing interest rates for investment borrowings (by cutting discounts) on home loans secured by owner occupied property as they need to contain their investment lending growth to less than 10% per annum. The chart below demonstrates the recent acceleration of investment lending which they are concerned about.
