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Is it time to act before APRA does?

Real estate & property news
02 October 2021
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As if the current shortage of available properties for sale and the high level of competition between buyers aren’t enough to put pressure on homebuyers in the bayside suburbs, there’s a new factor in the equation that has the potential to add to your motivation to make a move sooner rather than later.

Whilst the economic commentators may not be your favourite flavour of media, there has been a growing consensus among many of this nation’s financial gurus that we are likely to see a move by the Australian Prudential Regulation Authority to begin tightening the home lending market to try and slow the growth of property prices. Indeed, some people are suggesting that this could happen before the end of this year.

In fact, our Federal Treasurer, Josh Frydenberg, confirmed just this week that surging house prices were a key topic of discussion at a meeting of Australia’s Council of Financial Regulators last week.

Over the past year the typical Australian home has increased in value by more than 18 per cent, with record low interest rates fuelling increased debt levels. The total value of monthly home loan approvals, excluding the refinancing of existing loans, has jumped by more than two-thirds over the past year, despite the impact of the pandemic.

Mr Frydenberg was quoted as saying, “Carefully targeted and timely adjustments are sometimes necessary. There are a range of tools available to APRA to deliver this outcome."

What does this mean for local homeowners? If you have a mortgage on your current home, and you’re not planning on moving, then any move by APRA is unlikely to affect you at all. However, if you are a first home buyer who has pre-approval for a mortgage, or you are planning on upgrading your home which will involve refinancing in order to fund your purchase, then the smart thing to do would be to make your move as soon as possible, rather than dealing with potentially tighter lending conditions in the new year.

Obviously, none of us can be sure what APRA may do, but there’s a lot to be said for “the bird in the hand approach” when current lending conditions are so favourable for borrowers.

Don’t forget, our team at Barry Plant Frankston are always available to assist you, whether you need an update on your property’s current worth or you are struggling to find your next home in today’s market. You can call us any time on 9781 3100.


Barry Plant Real Estate

Frankston & Cranbourne

Real estate & property news
02 October 2021
Save Article

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