One Down and Nine To Go, Some Very Deep Breaths & A Basic Tip If You’re About To Purchase

Two weeks ago in my blog, I offered my ‘Top 10 Predictions for 2019’.

 I’ve had a few comments that my predictions may be a little brazen but I’m happy to be held accountable for what I’ve written as 2018 comes to a close.

 Clearly, the only certainly here is that the Eels will take the 2019 NRL Premiership and unsurprisingly, this is the prediction which has attracted the least amount of questions or comments – I think we all know that it is a foregone conclusion!

One of my predictions was that “the banks will start to loosen their lending procedures towards the end of 2019 as shareholders become agitated with diminishing profits.”

 Funnily enough, within a few hours of the blog’s posting on December 19, APRA (The Regulatory Body that governs banking policy) announced that it would will lift restrictions on interest-only residential lending from January 1 in an attempt to stabilise Australia’s ailing housing market.

 Many experts were highly surprised by this move, particularly when most predicted that any major changes would be delayed until after the Royal Commission releases its’ final report which is due in February.

 It certainly offers a strong indication that things have changed quickly…and a little too dramatically over the past few months.

I can probably claim a moral victory already with this prediction (one down…nine to go)…and there’s every indication that we’ll see a little more relaxation in policy once the dust settles on the Royal commission.

 In December, it was noted that the Sydney market had fallen 9.5% (from peak to trough) over the past year or so…and Melbourne is not far behind with a fall of 5.8% (peak to trough).

 Brisbane continues to hold firm with data released late last year indicating that the median house price has dropped by 0.4% over the past 12 months and the median unit price down by 3.8% over the same margin.

I’ve had many comments that the biggest surprise on my ‘2019 Predictions’ list was for property prices in Brisbane to come back by 2-3% this year – again, I’m no expert in these matters and to be truthful, I hope I’m wrong but the first six months of this year could be quite challenging for many sectors of the housing industry.

From our personal perspective, there is certainly a trend of buyers having had discussions with their finance broker or bank manager at some stage in 2019, only to discover that changes to lending procedures have meant that the loan that was a certainly to be approved is now no longer a possibility.

We ask plenty of qualifying questions to buyers (without trying to be too invasive) so that we minimise the chances of a contract falling over due to a finance application decline.

Generally, I’d like to think that we’re pretty good at this as we would only average 2-3 deals a year fall over due to finance issues but despite having some effective systems around this aspect, we did lose a higher than usual number of contracts based on finance rejections towards the end of 2018.

I’ve yet to speak to any agent that can’t honestly concede a similar experience.

Our advice is that it might be a good idea to speak with an experienced broker if it’s been a while since you’ve had prior to signing a contract on a property.

Not only will this save you time, but it will save you from spending unnecessary money as you’ve normally invested in a building and pest inspection report and some legal fees before you find out that your loan won’t be approved.

We’re also seeing a dramatic increase in brokers submitting applications that are crashing due to their own inexperience or lack of attention to detail – so please make sure you deal with a broker that knows exactly what they are doing!

We can help you with some great contacts if you don’t have the right people to talk to!

Right now, we are much busier than we normally are at this time of year and there’s no question that there will be plenty of turnover in the property market over the next few months.

How this translates into figures remains to be seen.

Until next week, Happy Listing & Happy Selling!