Australia Real Estate off-the-plan Market Forecast 2016 and the impact of the new APRA banking regulations



In 2015 the Australian Prudential Regulation Authority (APRA) announced that the big banks must hold more capital against their gargantuan mortgage books to provide a buffer against defaults. By Scott O. Talbot


Australian banks are now progressively reducing their loan-to-value ratios (LVRs) on investor loans from 95% down to 80%. Overseas investors the hardest hit, slashed from 80% down to 70%, in most cases.

Mortgage rates are not likely to rise as a consequence of the more stringent capital requirements however, many economists anticipate weaker off-the-plan sales into 2016. A weaker off-the-plan market translates to valuers down valuing purchase prices in certain precincts with a high level of apartment supplies and risk.


The Australian Prudential Regulation Authority (APRA) is the Government agency that oversees banks, credit unions, building societies, general insurance and reinsurance companies and was established on 1 July 1998.

www.apra.gov.au

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off the plan market forecast 2016