The market fallout from the banking royal commission
CoreLogic has announced Melbourne and Sydney housing markets can expect to be the most affected following APRA's stricter lending policies and the banking royal commission.
The CoreLogic Property Analytics team have shown that lenders are likely to make tighter regulations in response to the investigations into the sector.
Tim Lawless who is CoreLogic's head of research has predicted a fall in the Sydney and Melbourne market, cities which have previously enjoyed exponential growth in the market.
Interest only loans may be on the way out, making it harder for investment opportunities.
CoreLogic in it's April report recorded an annual decline of property value by 0.3 percent from the end of 2012.
Melbourne and Sydney have suffered the greatest fall in value, while Brisbane remains the only city to record a short fall of just 0.1 percent.
The data is also showing cities which may have lost traction over the past few years, such as Perth and Darwin, may soon become the perfect places to buy.
As demand weakens compared to supply, house prices will continue to edge lower over 2018 and 2019.
The Reserve Bank has warned against the possibility of the housing market taking a dive in 2020, not unlike the pattern America followed, taking a dramatic dive in 2012.
This pattern will not be assisted by the implementations of new lending guidelines which may result from the Banking Royal Commission.
What does this mean if you are looking to buy?
If you're searching for a new home, maybe you're already certain of a property, have a loan approved and are committed for life. For most buyers however, it's hard to be certain whether your new home will make you happy forever.
Unfortunately, the new lending conditions will make it much harder for people to reconsider their property choices, and certainly make people less inclined to sell up and move again. This would not only be a stressful move, but potentially very costly.
In a volatile and uncertain market, it's important to make sure you're next investment is a secure one. This includes doing all appropriate property checks including a building inspection, and of course requesting a Noise Report for the property. These types of checks will help you get a better idea of what you're really in for, and will assure you of the quality of the property.
Having these reports also gives the property a higher validation, and may put you in front of others, especially if you have plans to use it as an investment property.
It is too much of a risk to leave a large investment up to chance, especially with the threat of raised interest rates leaving borrowers blind sighted.