PHOTO: Property markets, particularly in Melbourne and Sydney, may start to stabilise soon, analysts predict. Photograph: Tracey Nearmy/AAP
Analysts believe soft property markets, particularly in Sydney and Melbourne , may bottom out next year, amid the banking regulator loosening a constraint on mortgage credit and an expected official cash-rate cut.
The Australian Prudential Regulation Authority proposed on Tuesday that banks should change the way they assess customers’ ability to meet their mortgage repayments in a move that would let people borrow more. Since 2014 customers have been required to meet an interest rate minimum floor of 7% but now lenders will be allowed to set their own benchmark, so long as there is a 2.5% buffer above the mortgage rate.
HSBC’s chief economist, Paul Bloxham, told Guardian Australia the housing market had been showing some early signs of improvement before the election. Auction clearance rates had lifted, the pace of house price declines had slowed and consumer sentiment was improving, Bloxham added.
READ MORE VIA THE GUARDIAN