There is evidence to suggest that the peak of the property market has been reached and we are now on a downhill slide, with no telling where it will end.
Lenders are beginning to get nervous and tightening borrowing, amid “growing concerns about falling prices.”*
“Caps are being imposed on loan-to-value ratios…and a limit on the dollar amount that will be loaned”*
“AMP is one of several big lenders circulating ‘black lists’ of suburbs where apartment buyers will face tougher terms and conditions, including increased scrutiny of their ability to pay.”** Examples of these suburbs are Homebush and Arncliffe, which are more than 10 kilometres from the CBD and have a lot of apartment building being undertaken, therefore being in ‘over-supply’.
These stricter terms and conditions include tougher:
Rules on amounts borrowed
Number of apartments purchased in a single development
Controls on the use of commission and overtime payments used in determining a buyer’s income
“Lenders are concerned about the number of new apartments expected to flood onto the market…adding to a large existing inventory of unsold or vacated apartments.”**
“Developers are under pressure to complete deals to ensure lender funding for the total project and many buyers need help to bridge deposit gaps because of tighter bank lending to buyers.”*
Will negative gearing rules be changed? Any lessening of the benefits of negative gearing will have a significant impact on the property market.
We have always advocated for investors and home buyers to not try and time the market.
Review your financial position and buy within your budget, allowing for some upward movements in interest rates.
This is sensible purchasing.
We offer Loan Advice and can assist you if you wish to borrow money to buy a property.