The Commonwealth Bank of Australia (ASX: CBA) share price is up 1% to $69.30 in morning trade with gains in bank shares offsetting falls across other sectors to help deliver a marginal fall for the S&P/ ASX200 (ASX: XJO) this morning.
The Commonwealth Bank share price is higher after the banking supervisory and prudential regulator APRA this morning announced it is to remove restrictions it placed on bank lending to property investors in the interest-only space.
Since March 2017 APRA had banned more than 30% of bank loans being made on an interest only basis and also stated that interest-only loans on a high loan to value ratios (above 80%) should also be further restricted, with those on LVRs above 90% especially restricted.
The easing on lending restrictions is good news for banks across the board as the more banks are free to lend against bricks-and-mortar the more likely they are to grow profits sustainably and on an acceptably risk-adjusted basis.
Elsewhere today the Westpac Banking Corp (ASX: WBC) share price is also up 0.6% to $24.77.
The Australia & New Zealand Banking Group (ASX: ANZ) share price is up 0.8% to $23.94.
The National Australia Bank Ltd (ASX: NAB) share price is up 0.9% to $23.34.
If the changes help to reverse falling house prices in Sydney and Melbourne this will be another boost for bank investors as it will protect the value of the core assets on their balance sheets.
