As lenders clamp down on investors to comply with APRA’s new rules, they are looking to attract owner-occupiers with generous sweeteners.

APRA’s requirement that investor-loan growth remains below 10% is triggering a significant shift in the mortgage market.

HSBC has announced it will not write any more investor loans to new customers. AMP has put all lending to landlords on hold, and other banks have raised investor mortgage rates. 

But Ashley Playsted, CEO of mortgage broker Wealthie, says that those loans aren't disappearing into thin air. 

"Those clients will get the loans somewhere else,” he said. "Some of the foreign banks and the non-bank lenders are not bound by the same capital rules, and are still able to lend the money. What we’ve seen is the loan volume transferring, not disappearing."

Harry Triguboff, in ‘The Australian’ on Wednesday, took a dimmer view. He said, “The whole building industry is based on investors. It is being underpinned by very low interest rates.” Speculating that APRA’s actions could trigger a fall in property prices, Mr Triguboff said, “Why should they (foreign buyers) buy in a country where prices could be pushed lower.” He notes that a withdrawal of foreign buyers would further depress prices.

But Mr Playsted saw a positive in the tighter investor-loan regulations. He said lenders are aggressively targeting owner-occupiers to make up any shortfall. “It's having positive effects for home buyers or owner-occupiers because it’s creating a pressure bubble for banks and other lenders to source their loans from occupiers as opposed to investors.”

Mr Playstead noted that a number of very competitive owner-occupier incentives are being offered. "We’ve seen NAB offering 250,000 velocity points, we’ve seen Westpac offering $2,000 cash backs. These are incredible incentives the banks are offering to owner-occupiers.”

"250,000 velocity points will get you a flight to New York,” he added.

The tighter regulatory environment for investors is also affecting the first-property-buyer segment of the market that has been purchasing investment properties, rather than properties they intend to live in. "Those first-home buyers are now being killed off stone dead,” said Mr Playsted. "They were able to buy with 5-10% deposit. Now they’ll need a 20-30% deposit, and very few first-home buyers are going to have that sort of money. 

"The positive is though that if a first-home buyer qualifies for a loan, there are some incredible incentives around. If you qualify for a loan the changes are actually fantastic news."