2018 - the year that was in real estate
With the Royal Commission in full swing, the banks have been ordered to rigorously check overall debt levels, income & expenses of borrowers. This has resulted in far fewer buyers in the market as they simply cannot get funding. Or if they can, it is not at the level that they would like. Add to this, there has been a surge in rejected refinance applications due to stricter controls now being applied by the banks meaning some customers who want switch banks, cannot.
At a time of year that traditionally sees people put their homes on the market, we've seen buyers with reduced access to credit. This means fewer active buyers. With more homes on offer and reduced competition, a slow down in the market is a natural consequence of a market people cannot afford to buy in to.
With the Victorian election over, we are looking at a federal election where a change of government will likely result in reforms to negative gearing and captial gains tax. Mix this all together with the overall confidence of the market, fuelled by click bait media "doom & gloom" headlines and many buyers are taking a wait and see approach.
To a large extent, the change in the market we've seen in 2018 is as a result of "artificial" factors (government & regulatory policies, bank lending practices) versus a change in sentiment of buyers and sellers.
Let's see where the market heads as we move into 2019.
