FINANCE in the property world is certainly changing rapidly right now.<\/p>\n
One of the key drivers in this has been the Royal Commission into Australia\u2019s banking sector.<\/p>\n
Certainly banks needed a wake-up call — and a broom taken through some of their poor practices – as has been well documented in the media.<\/p>\n
From the developer\u2019s end, banks are certainly tightening their criteria in accordance with Australian Prudential Regulation Authority directives to reduce their exposure to property.<\/p>\n
We are in a situation of massive population growth which, in turn, means high demand for land and houses, so it is counter-intuitive for APRA to restrict funding that in turns reduces supply.<\/p>\n
The basics of economy are supply-and-demand equilibrium. Creating an environment of high demand and low supply can only mean one thing; that is, you guessed it, increasing housing prices.<\/p>\n
At the other end of the spectrum, the Royal Commission has cast shadows over mortgage-broking practices which is resulting in a tidying up of bad practices, which was needed.<\/p>\n
But, unfortunately, an over-reaction of the banks to tighten their lending practices to home buyers may lead to a credit squeeze which could cause a major correction.<\/p>\n
Certainly, land and house prices have soared in the last 18 months and, hopefully, some sense will prevail and they will stabilise.<\/p>\n
Otherwise we will fulfil our own prophecy.<\/p>\n","protected":false},"excerpt":{"rendered":"
FINANCE in the property world is certainly changing rapidly right now. One of the key drivers in this has been the Royal Commission into Australia\u2019s banking sector. Certainly banks needed a wake-up call — and a broom taken through some of their poor practices – as has been well documented in the media. From the […]<\/p>\n