- 1 March, 2018
- PROPERTY MANAGEMENT, RESIDENTIAL
- Interest rates, OCR, Mortgages
The Official Cash Rate (OCR) remained on hold in February and is projected to remain below 2.00% until the end of 2019, which is good news for new borrowers and those coming off ﬁxed rates.
The new loan-to-value ratio (LVR) restrictions are now in place. They are only a minor change from previous restrictions with the deposit requirement for investors dropping from 40% to 35% and the share of high LVR lending (above 80% LVR) to owner occupiers increasing from 10% to 15%.
The expected impact on the market is minimal, although it will contribute to a small lift in demand from those who were previously unable to satisfy the LVR requirements.
The Government has now introduced new legislation which will make good their policy of extending the two year bright line test to five years. This means all second homes and investment properties acquired and sold within five years will be subject to income tax.
This change will only take affect for properties purchased after the bill takes effect, which is expected to be in late March 2018.