This is what happens when you let academics loose in the market. One distortion inevitably leads to another and another and another. You don’t cure a problem by forcing distortions on the market. Academics read books and devoutly follow theories. They have no clue on what reality is and how it works. Controls enrich the already rich, and punish those not so well off. Brilliant.
How Reserve Bank can take on big landlords
Friday Nov 14, 2014
Governor eyes ways to curb multi-property buys
Landlords with more than five properties might be the Reserve Bank’s next target after Governor Graeme Wheeler warned of “further measures” to discourage multiple investors.
Wheeler this week revealed how the bank was considering discouraging multi-property investors who benefit from the loan-to-value regime at the expense of first-home buyers.
The rules introduced in October last year restrict lending at loan-to-value ratios (LVRs) of more than 80 per cent to 10 per cent of new lending. And while first-home buyers struggle to save a 20 per cent deposit, equity-rich landlords are swooping on the cheaper properties, creating a new set of issues.