Looking ahead to the future
Although over the last few months, analysts have blamed a range of contributing factors for the state of the property market, in this month’s Core Logic Monthly Sydney update, Tim Lawless squarely points the finger at the credit squeeze. He says:
“… it’s clear that tighter credit availability is acting as a drag on housing demand and impacting adversely on the performance of housing values across most areas of the country.”
Similarly, the ABC reports the Reserve Bank’s assistant governor Christopher Kent, has discussed that the market is entering a second phase of the downturn initially brought on by the combination of changes to investor lending, and the reduction in interest-only lending. According to the RBA, these two factors were beginning to have a positive effect on the market, however then the Financial Services Royal Commission dropped its bombshells, and as a result credit availability has dropped significantly across the board.
6 Months later, an increasing pressure on regulators is to actually ease the legal adherance of lenders to, if not to the same extent as the banks wilful disregard of lending practices prior to the Financial Services Royal Commission, then at least to somewhere in between. A happy median that only puts home buyers in a slightly more precarious financial position than they should be.