The general Melbourne property market is being adversely affected by the repercussions stemming from the Banking Royal Commission and a tightening of APRA (the banking governing body) provisions with respect to lending practices.
In our view, the regulators have overshot the mark with the effect on buyer activity plain to see every Saturday at auctions around the city, with property failing to sell or even attract bidders in some instances.
In essence, we are in the middle of a credit squeeze. Pure and simple. It is not a matter of purchaser’s intent being affected. It is their capacity to actually borrow (a sufficient amount of) money that is the issue.
This is, of course, very much a double-edged sword which, depending on your circumstances, will be either good or bad news. For instance, if you have finance approved or better still, don’t need any finance, you will be in a very strong bargaining position.
Many of our Expat clients are seeing this as an opportunity to get into a softening market for the first time in about 6 years. Our advice to them and all of our other clients is simple.
“Hasten slowly”. What does that mean? There is no need to buy a property “tomorrow” as the current financial environment is likely to prevail (at least) during 2019. Having said that, there is nothing wrong with buying the right property if it presents itself. Trying to pick the bottom of the market is a high-risk strategy as the Melbourne market is notoriously resilient. Particularly with circa 120,000 people moving to our city every year.
You don’t want to wake up one morning and the market has turned. And it will happen, it’s just a matter of when.
So no hurry (yet), take it slowly, find the right house (ie. let us find the right house for you!), do all the appropriate due diligence and buy it for the right price.
In our view, you have 12 months to do so. After that, I make no promises!!