Assessment rates
Cameron Kusher from REA group muses the growing problems associated with the 300 basis points lending assessment buffer.
An unusually wide assessment buffer might well have been a useful tool when mortgage rates were at record lows and borrowers were piling in with abandon.
But now with 225 basis points of hikes already delivered - and with borrowers acting with an abundance of caution - the buffers have become a hindrance, stymying the flow of credit.
Agreed. I'm currently on the phone to mortgage brokers trying to finance the purchase of a simple rental in Sydney, which is proving to be insanely difficult for what should be a straightforward loan.
Meanwhile, rental listings continued to fall to a new record low last week, with tightening now being driven the reversal to Sydney and Melbourne, with Brisbane also seeing rental listings drop...while Perth, Hobart, and Adelaide are tightening further to chronically tight levels.
Source: SQM Research
Immigration is now expected to return population growth towards 400,000 per annum.
As discussed and noted previously, it's time to drop the 300 basis points buffer, as the assessment rate is too high (especially for investors, but also for homebuyers).
