Australia's Housing Market: The Current Challenge

Is now the right time to buy property? Is Australia’s property market steering towards steadiness or is there a plethora of problems on the horizon? These questions are basically irrelevant at the moment as lending is at an all time low, and conditions are the toughest they have ever been. If you can’t borrow money, you can’t invest and being unable to buy property makes it difficult for the property market to recover.

Even if interest rates drop below zero, there is little benefit to everyday Australians if banks can’t find a way to loan that cheaper money to the people who need it. If the recent rate changes, the increased spend on infrastructure and the proposed tax cuts do have an impact on the economy, we can expect to see property prices begin to rise. If they don’t, along with the property market, the whole country will suffer.

Access to the cheapest money in our nations history doesn’t mean much if it is inaccessible to Australians wanting to invest in property.

In regards to the recent APRA review, the serviceability calculation will no longer be 7.25%, it will be dropped to 6.25%, effective immediately. This change will allow many Australians who have been on the cusp of purchasing property to enter back into the market. History demonstrates that the banks will loosen their grip on lending, especially with the competitiveness of second and third tier lenders.

Finance has a sizeable impact on the housing market and we are positive in predicting that moving forward, the banks will recover from the Royal Commission.

If you are looking at lending options, contact us to be connected with one of our award winning finance partners.