Borrow
Australia on the verge of home loan limits as NZ limits deductions for property investors
Borrow
Australia on the verge of home loan limits as NZ limits deductions for property investors
While Australia looks to be on the verge of home loan limits, neighbouring New Zealand has taken action in response to its booming property market.

Australia on the verge of home loan limits as NZ limits deductions for property investors
While Australia looks to be on the verge of home loan limits, neighbouring New Zealand has taken action in response to its booming property market.

Treasurer Josh Frydenberg has strongly indicated that a crackdown on high-debt home loans was imminent following discussions with the Council of Financial Regulators, including the Reserve Bank of Australia and the Australian Prudential Regulation Authority (APRA).
Following the meeting, APRA confirmed in a statement that it plans to release “an information paper on its framework for implementing macroprudential policy” in the coming months and that it would continue to consult with the Council of Financial Regulators on the potential implementation of any measures.
Across the pond in New Zealand, the government has introduced draft legislation that will limit the deductibility of mortgage costs on residential property investments.
Set to take effect from 1 October, the legislation will limit the availability of tax deductions for interest expenses on investment properties acquired on or after 27 March of this year, excluding new builds and the main family home.
“Tax is neither the cause nor the solution to the housing problem, but it does have an influence, and this is part of the government’s overall response,” said finance minister Grant Robertson.
“We want to curb investors’ appetite for existing residential properties but also want to stimulate investment in new housing. That’s why we’re also proposing an exemption for property development and for new builds, allowing interest deductions in full.”
Median property prices in New Zealand rose to a record $850,000 in August, up by 25.5 per cent from a year earlier, according to the Real Estate Institute of New Zealand.
In Australia, the median property price rose to over $666,000 in August, according to CoreLogic, an increase of 18.4 per cent compared to August 2020.
However, AMP Capital chief economist Shane Oliver said it was unlikely Australia would follow in New Zealand’s footsteps due to the unpopularity of changes to negative gearing as seen in the last federal election along with the difficulty of negative gearing with low interest rates.
“What’s more, investors are now only around 25 per cent of total housing loans in Australia — compared to 45 per cent in the last boom — so they are not really behind the current surge in home prices,” Mr Oliver said.
“Going forward, macroprudential controls are now looking imminent, but these don’t require legislation, as they will come from APRA — most likely around limiting high debt-to-income and loan-to-valuation ratio loans and possibly mandating higher interest rate serviceability buffers to slow lending.”
The latest data from APRA indicated that debt was at least six times higher than income in 22 per cent of new home loans during the June quarter compared to 16 per cent in the previous year.
“Australia needs a more comprehensive approach to approve affordability, with Canberra and the states working to boost supply, take pressure off cities and reform taxes — like replacing stamp duty with land tax and reducing the capital gains tax discount,” Mr Oliver said.

Loans
CBA launches digital home loan with 10-minute application
According to the bank, Unloan will provide a single low-cost interest rate to borrowers with an application time of as little as ten minutes. ...Read more

Loans
Are central banks weighing the economic pain of rate hikes?
The hype around interest rate hikes usually centres around the urgent and fundamental need to alleviate the consequences of inflation – but does this monetary policy do more harm than good? ...Read more

Loans
As rates begin to rise, how much more will new borrowers pay?
Mortgage holders could be asked to pay over $1,000 more per month due to rising interest rates. ...Read more

Loans
New investor home loan commitments climb to a record high
The value of new investor loan commitments reached $11.7 billion in March. ...Read more

Loans
Major banks announce interest rate changes
Following the RBA’s first rate hike in 11 years, the big four banks have tweaked their home loan variable interest rates. ...Read more

Loans
Up to $400bn of fixed rate home loans tipped to roll off into variable rates
A surge of refinancing is anticipated in the next couple of years. ...Read more

Loans
‘Liar loans’ most prevalent at ANZ, survey finds
UBS has identified an increase in factual misstatements coming from ANZ’s mortgage customers. ...Read more

Loans
How will rising rates impact mortgage stress?
Mortgage holders could face thousands of dollars in extra repayment costs per year as a result of impending rate hikes. ...Read more

Wrapping up an eventful 2021
Listen now

What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now

Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now

Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now

Loans
CBA launches digital home loan with 10-minute application
According to the bank, Unloan will provide a single low-cost interest rate to borrowers with an application time of as little as ten minutes. ...Read more

Loans
Are central banks weighing the economic pain of rate hikes?
The hype around interest rate hikes usually centres around the urgent and fundamental need to alleviate the consequences of inflation – but does this monetary policy do more harm than good? ...Read more

Loans
As rates begin to rise, how much more will new borrowers pay?
Mortgage holders could be asked to pay over $1,000 more per month due to rising interest rates. ...Read more

Loans
New investor home loan commitments climb to a record high
The value of new investor loan commitments reached $11.7 billion in March. ...Read more

Loans
Major banks announce interest rate changes
Following the RBA’s first rate hike in 11 years, the big four banks have tweaked their home loan variable interest rates. ...Read more

Loans
Up to $400bn of fixed rate home loans tipped to roll off into variable rates
A surge of refinancing is anticipated in the next couple of years. ...Read more

Loans
‘Liar loans’ most prevalent at ANZ, survey finds
UBS has identified an increase in factual misstatements coming from ANZ’s mortgage customers. ...Read more

Loans
How will rising rates impact mortgage stress?
Mortgage holders could face thousands of dollars in extra repayment costs per year as a result of impending rate hikes. ...Read more