* CBA hikes rates by 24-26 basis points for home buyers
* ANZ raises rates by 11-25 basis points
* Regulators worried about risks in housing, may take steps
(Adds rate changes by CBA)
By Swati Pandey
SYDNEY, March 24 Two of Australia's largest
banks jacked up mortgage rates for speculative buyers on Friday
as part of an intensifying campaign by regulators to hose down a
heated housing market.
The out-of-cycle hikes come at a time when the central bank
held rates steady for an eighth straight month in March, citing
the "build-up of risks" in home prices and household debt.
Speculation is high that the main watchdog, the Australian
Prudential Regulation Authority (APRA), is about to tighten the
screw on bank lending, adding to rules imposed in 2015.
Treasurer Scott Morrison all but confirmed that steps were
afoot in a news conference on Friday, saying he and the
regulators were "concerned" about the resurgence in investment
borrowing seen in the last few months.
"The next step is to make any announcements they think
necessary to address that issue," said Morrison.
Already the banks have responded to the pressure by hiking
rates on investment loans, and particularly interest-only loans
favoured by speculators.
ANZ on Friday raised its variable interest rates on investor
loans by 25 basis points (bps) to 5.85 percent, effective March
It lifted rates on interest-only loans by 11 basis points to
5.85 percent for investors and by 20 bps to 5.25 percent for
owner-occupiers. The changes are effective April 22.
Variable interest rates for owner-occupiers who repay both
principal and interest remain unchanged at 5.25 percent.
Commonwealth Bank of Australia said it was raising
rates on interest-only and investment home loans by between 24
and 26 bps, effective May 8.
Last week, it demanded investors stump up a larger deposit
for new loans.
"These changes reflect a need to closely manage our
regulatory obligations, our portfolio risk and the competitive
environment," Group Executive Fred Ohlsson said in a statement.
Last week, National Australia Bank and Westpac
Banking Corp made similar hikes, citing regulations,
higher funding costs and intense competition.
Regulators are increasingly worried that home prices in
Sydney and Melbourne - Australia's two biggest cities - may be
in a bubble territory.
Latest government data showed home prices rose 4.1 percent
in the December quarter, from the previous quarter, with Sydney
up a red-hot 5.2 percent.
The pace has quickened even further this year. Figures from
property consultant CoreLogic showed prices were growing at an
annual 19 percent in Sydney, while gains across the five capital
cities amounted to 12.7 percent.
Much of that fever has been fuelled by borrowing for
investment properties, driving household debt up to a record 180
percent of disposable income.
(Reporting by Swati Pandey; Editing by Kim Coghill)