ANZ reviews investor lending amid reforms

The looming ban on interest deductibility for landlords will force the banks to take a look at investor affordability.

ANZ chief executive Antonia Watson said the bank's "affordability equations will need to be reviewed": "We already have various buffers built in to our assessments but given many investors will be required to pay more tax in the future we may need to tweak them further to account for this," she said.

The big four bank is reviewing what the deductibility ban will mean for its existing lending book.

The changes are likely to have a major impact on bank behaviour and lending to investors in the coming years.

Watson added: "We’re looking into what this will mean for our current mortgage book which at the moment is flowing to about 70% owner occupiers and 30% investors."

The chief executive said its decision to introduce 40% deposit requirements had reduced investor applications, but demand remained strong amid a lack of assets on the market.

"Late last year ANZ led the market by introducing 40% deposits for investors and that’s seen the number of investor applications declining and the gap has been filled largely by owner occupiers. Our growth home lending volumes are still very strong which means the country still has a demand and supply issue."