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Why this house price slump is different from the last one

Amid all the gloom engulfing the housing market, here's a sliver of more positive news you may have missed. The Westpac Melbourne Institute index of consumer sentiment recently suggested home buyer demand is gradually recovering from its recent low, with the number of consumers who think now is a good time to buy a home lifting substantially in the past year. Over the decades this survey has been running, a change like this would normally suggest prices might stabilise within about six months. But as more experts are realising, the current slump in property prices is different from previous dips in an important way: it is being driven by banks' home loan decisions. Why does that matter? Beca

Banks ‘really conservative’ after royal commission

It is turning out to be progressively difficult for property purchasers to get a home loan in the wake of the royal commission, as spooked banks are becoming increasingly protective and conservative with their lending. The response from the banks has been prompt and the banks are taking a very firm-line black and white approach. The largest area currently hit by the royal commission is assessment of living expenses this means that borrowers won't have as much capacity to borrow as they need to factor in additional expenses. This coupled with the APRA changes of December 2014 means that its getting tighter for property investors. This is expected to continue for the next 12 months at least. F

Tighter lending driving Sydney's auction clearance rates towards 50 per cent

The Sydney housing market has dropped close to an auction clearance rate of 50 per cent, among its lowest points since before the most recent boom began, as it continues to grapple with tighter lending standards and weaker supply and demand. The city's auction clearance rate closed at a preliminary 52.3 per cent at the weekend. Melbourne's market, meanwhile, proved more resilient, with a clearance rate of 61.6 per cent, although both were lower than comparable weekends in the previous year, Corelogic data shows. Sydney's rate is likely to come down further, to around 47 to 49 per cent, when final results on unreported auctions are collected this week, agents and experts say. The lower volume

 
 
 

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