Tighter Lending Standards will lead to massive losses in Australian Property.
No one likes to admit that prices are set to drop by up to %05 in the coming years. The Royal Commission is exposing shocky lending practises, and the response will be to tighten lending standards leading to massive drops in prices.
If you can get into cash now you should do it, whatever you do - do not buy now.
The thing to do, is to look to buy when prices drop by at least %35 in the next 12- 18 months.
What will the government do to save the tragedy ? Who knows - for me it looks like I was right to start saving a while ago.
The Royal Commission will be published in October and by early next year the prices will be cascading down.
It is ok for people who have paid off at least half the value of their properties, but with tightening credit. it will be very hard to sell property to people who need bank finance.
I am investing in BTC and Holding cash in low interest bearing deposit- the time to buy will be around a years time.
Its not a problem as long as people hodl and can afford to repay. Thats why extra repayments while interest rates are low is key. will be interesting to see how far it will drop but I believe its more of a correction than a crash. From memory property is 27 percent above the trend. So if it drops 27 percent its a correction ;) if other factors like unemployment come into play, well it could turn into something more sinister. Its looking grim for the developers and construction industry.
I appreciate your comment and if it drops 27% I will be delighted - cause I am looking to buy , having sold early this year, before the Royal Commission. For most people though tighter lending standards are going to mean they cant buy what they want even if it drops by 27-35% , cause the banks want lend them the money
Good luck and hope you find something :)