Bank lending poised to tighten further. Demand for credible alternative finance options is likely to increase in the short term.

One of Australia’s most respected economists says there is a “good chance” the prudential regulator will crack down on a recent lift in property investor activity by announcing stricter lending conditions for banks.

Last week’s housing finance figures for the month of June showed a 3.2 per cent increase in investor loan commitments following a 3.9 per cent surge in May.

In a note this week AMP Capital chief economist Shane Oliver said investor lending is having a bit of a bounce after growth in the total bank book of lending to investors fell way below the APRA 10 per cent limit.

“But it’s doubtful that investor lending will be allowed to pick up too far as there is a good chance that APRA will lower the 10 per cent limit to around 7-8 per cent,” he said.

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