2017 in Review: Biggest Financial Announcements of the Year

Launch Finance - 2017 in Review: Biggest Financial Announcements of the Year

It’s been a busy year for the finance and mortgage industry with plenty of changes, and the introduction of new policies and products, so in case you missed it, we’ve collated the biggest events of 2017 for you:

  • 1.5% Cash Rate – The RBA left the cash rate at a record low of 1.5% throughout the entire year, after reducing this in August 2016.
  • Henderson Poverty Index replaced by HEM – The Australian Securities and Investments Commission (ASIC) have been tightening lending criteria for the past 2 years and in 2017 took this a step further by focusing more on borrower’s spending habits. The Household Expenditure Method was introduced to replace the Henderson Poverty Index to allow brokers to better assess a borrower’s spending habits.
  • First Home Super Saver Scheme – The Government’s 2017 Federal Budget provided a new incentive for first home buyers in the form of a “First Home Super Saver Scheme” that aims to assist Australians in getting into their first home sooner. First home buying Australians can contribute up to $15,000 per year and $30,000 in total as part of the scheme. These contributions will be taxed at the super concessional rate of 15%, boosting savings significantly.
  • 12.5% Tax on Property Sales $750K and over – The 1st of July 2017 saw the implementation of a new 12.5% tax on property sales of $750,000 or more issued by the ATO if sellers cannot prove that they are an Australian Resident. The new policy intends to ensure foreign property owners do not avoid capital gains or other tax liabilities.
  • Interest Only Loan Changes for Investors – 2017 proved a tough time for Investors as investment loans became more restricted and in March, the Australian Prudential Regulation Authority (APRA) wrote to lenders, instructing them to keep new interest-only loans to just 30 per cent of their total home loans portfolio. This resulted in many lenders removing the ‘interest only’ loan products for investors all together and others tightening the eligibility criteria for these types of loans.

2017 was a big year in our industry, with a lot more regulation and restrictions, but with time we learn more about what to and not to do. We hope you found our updates helpful and we look forward to providing insightful updates throughout 2018 for you.