I don’t want to go near the royal commission topic as it is more relevant to the finance industry and we are still only half way through.
One thing that is clear is that the onus on banks to verify income and expenses is going to slow the process down and make it more onerous on buyers wanting to get a loan.
No doubt with tighter servicing requirements, we are going to see less loans and fewer houses being built which funnily enough has a counterproductive role in what some talk about as the housing affordability crisis. I WILL be talking about this aspect at our event on 18th of June on the Gold Coast. Join us for a Q&A format and bring along your most vital questions for our industry experts to answer on the night and stay for drinks and a quick bite after the event so you can mix with other investors and the experts present on the night.
As I have said many times, while Sydney is a tough place to buy property for the newbies, the rest of the country is no-where near unaffordable. Even Melbourne. When you consider you can buy a 4 bedroom house 30klms from Melbourne CBA for under $400 000, it is within the boundaries of affordability for many.
Places like Brisbane you can get the same at around 20klms from CBD.
Unfortunately when APRA and the banks tighten up lending and pull back the Sydney market activity, at simply means good people trying to take responsibility for their own retirement by investing in the Australian building industry, are unable to do just that so less houses get built and higher demand means rents go up and house price pressure is in the up direction too.
As the Sydney market has stabilised and in fact is dropping slightly, I fully expect we will see another growth spurt for Sydney and certainly Melbourne over the next 1-2 years.
We are already seeing a greater influx of people selling off in Melbourne and Sydney and taking the extra equity and buying in Brisbane for half the price or a third and enjoying a greater lifestyle. This is now well and truly having the effect that we are seeing demand increase for Brisbane properties much like It did for both Sydney and Melbourne before their boom phase recently so we can fully expect a 40%- %70 increase in Brisbane house prices over the next 3-4 years.
Hold onto your hats and for those who can afford to get in and pass the bank servicing requirements, I encourage to look very closely and then act if they can.