_Stability restored to the Australian residential market

Holding two state elections, handing down the banking royal commission findings and going to the polls for a federal election—all within the space of six months—hasn’t been the ideal stimulus for a cooler Australian housing market. 

Although since the Coalition retained power on 18 May 2019—eliminating any changes to negative gearing and capital gains tax—an instantaneous positive sentiment has rippled through the housing market. 

This includes restored hope of home ownership for 1,000 people eligible for the 5% First Home Loan Deposit Scheme. 

After several years of the housing market adjusting to stricter lending practices, APRA has proposed removing another temporary measure which saw new mortgage customers assessed to manage repayment for the higher of either an interest rate of 7%, or a 2% ‘buffer’ over the loan’s actual interest rate. 

The first signal a more responsible lending environment was being practiced was the discontinued 10% cap on investor loans from July 2018, then in December 2018 the 30% lending cap was repealed on ‘interest only’ loans.

There is also a strong chance the RBA will cut the cash rate by 25 bps next month, and potentially another by the year’s end, providing a ripe opportunity for buyers to return to the major markets.

Read our latest Australian Residential Review here.