FNQ homebuyers face home loan lockout as APRA tightens rules

A decision to force lenders to use tougher tests for home loans could result in some Far North residents being locked out of the great Australian dream.

AS THE banking regulator looks to put a lid on the overheated capital city property markets, one lender claims these actions are in danger of locking out vulnerable people in FNQ from owning their own home.

But a Cairns mortgage broker said this is “shutting the door on thousands of potential homeowners.”

Today the Australian Prudential Regulation Authority (APRA) announced tougher measures for home loans by increasing the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.

Cairns Mortgage Brokers director Roger Ward PICTURE: BRENDAN RADKE

APRA said it expects this “will reduce maximum borrowing capacity for the typical borrower by around 5 per cent.”

But according to FNQ lenders and real estate agents, the regulator is applying a city approach to regional markets which will lock out a whole generation from home ownership,

Cairns Mortgage Brokers director, Roger Ward said the regulator, “is completely disregarding the regional markets such as Cairns.”

Mr Ward said APRA should only be applying these new rules to capital city markets where the prices continue to skyrocket as many regional people will be disadvantaged.

“APRA has increased the loan servicing rate to cool the Sydney and Melbourne bubbles but regional housing markets like Cairns and Port Douglas are trying to get up off their knees,” he said.

“If a single parent or a low income earner here is trying to get into their first home, what happens is these people are now locked out of home ownership.

First National Real Estate Cairns Central Director David Forrest. PICTURE: ANNA ROGERS

“Cairns is not booming out of control, but APRA has not thought about regional Australia.”

First National Cairns Central managing director, David Forrest, said he felt APRA was not taking regional housing markets into consideration.

“I see the financial lending market as taking a sledgehammer to someone that needs microsurgery,” he said.

“We need to look after the places where the markets are out of control, instead of taking a broadbrush to the whole country.”

Mr Forrest said while the Cairns housing market is enjoying an upswing, it’s been a long time coming.

“Cairns property has really only been buoyant since November last year,” he said.

“I believe this approach is reflective of the city-centric attitude in our (country’s) leadership.”

Originally published as FNQ homebuyers face home loan lockout as APRA tightens rules