Increased rates could be ‘harmful’ for property market
Property Investment Professionals of Australia (PIPA) has expressed concern about the widespread moves by lenders to up their interest rates, saying it could be to the detriment of the broader property market and its investors.
PIPA chair Ben Kingsley said increasing interest rates for existing investors appeared to be an “opportunistic move by banks” that could have potentially harmful flow-on effects.
“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,” Mr Kingsley said.
Speaking to SMSF Adviser, he said that in general, PIPA is against market intervention and manipulation.
“We have been calling for industry regulation for years without any government of the day doing anything about it. We are concerned about the changes that are occurring and we still believe a consumer awareness campaign about the risks of investing in property is a better approach than market intervention,” he said.
“SMSF trustees are usually more knowledgeable and more advanced investors and they know the long-term investment returns for certain types of direct property investment, so this market manipulation is disappointing,” Mr Kingsley added.