Apra changes

Treasurer has announced he will be urging APRA to take risk out the housing market. At this stage details are unclear on what this will entail.
Anyone want to have a guess what measures will be introduced?
My guess is lower debt to income ratios.

 

Last time it was increasing serviceability requirements and reduction of I/O loans. Probably along the same lines again.

 

I wrote about this yesterday
Loan Tip: Expect it to become Harder to Borrow (Soon!)

 

Also see Redom's post:
How APRA Will Reduce Your Borrowing Power

 

It is in parts.

 

This big 4 have already been tightening. It is almost certain CBA will be the first....based on their CEO raising concerns about Sydney prices.

Tightening policy 800 to $2m loans would affect Sydney and Melbourne the most ...Sydney would be hard hit for houses. But then unis would move up. It would leave most other states okay...but would curtail booms in the inner markets in particular Brisbane....Perth...Adelaide where it has been strong.
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Just look at the medians to get an indication Sydney ...Melbourne ..Canberra have medians of 1.4m.. .1.1m and 1.05m respectively. That means 50% of houses are over the respective figures and 50% over this figures. The bottom 25% of houses would be roughly 700k plus leaving very few there.. Melbourne is better at 550k plus and Canberra at 500k plus.

If they enforce 6 times earnings with majors family on 200k is at 1.2m.. previous lot of majors would have pushed to 1.4 to 1.5m.

Will be very interesting to see what they do with people like Pepper who I am a fan of.

 

House prices are so low in Perth though in comparison to wages that I don't think APRA will affect the Perth market to the same extent as say Syd Melb.. but we shall see...

 

Yep ditto... The APRA policy is targeted towards markets in Sydney .. Melbourne .. Cabrera....high markets / inner city markets in Brisbane...Perth and Brisbane.....but less so. Banks by policy design may also limit lending like NZ by asking people to come up with 30% deposits plus stamps for places over say 1.5m. That would make things interesting....let's see....

The fact that the treasurer and the banks are talking about this . . This dog is going to hunt it won't go away. Be prepared....for this to have some impact over the next 12 months.

 

The fact that Perth hasn't had widespread booms would (for me anyway) really question whether or not I want to invest in Perth at all. I'm not saying you can't do well in Perth. I know Westminster has done pretty well over there. But if this massive global boom sentiment can't get Perth markets THAT excited....then for me...it confirms Perth is likely a place I'd want to think very, very carefully before entering their markets. And I'd want to have a bloody good idea of what exactly makes them tick before investing there.

Again, no hating on Perth. Just how I see it in terms of risk.

 

Perth has its own problems, iron ore price has crashed from 220 to 120 this year...

 

Yeah, it’s interesting. Where we are in the northern coastal suburbs we’ve seen price increase of 15-20% over the past year and the market is pretty hot, but from what I hear nowhere near as hot as Brisbane. Will be interesting to see what happens with larger factors such as the iron ore price and borders being reopened.

That said, if you aren’t bullish on Perth then you can always use it as a good hedge against getting rich

 

I cannot find consistent data about Perth property price change - Corelogic stopped publishing price data for Perth; see different data from REIWA and onthehouse, but in general, it seems still going up quite steadily. From ABS data the other day (up to June quarter), they are not far behind from other cities? Or I missed something?

 

Great. Just as Druitt houses are stupendously high, higher than most bogans out there, the government decides to try and spoil the party. Hey, you, get offa my cloud!

 

Two months old, but an interesting article.

What's up with Perth's housing market?


And this one more recent.

Perth lags as national house prices post record rise

 

Some of Perth is quite cheap I think it definitely will continue rising. I would consider Bassendean, Perth quite similar to Mt Gravatt East, Brisbane after living close to both of them. Bassendean would be half the price. After observing both the cities over the past 24 years sometimes Perth is cheaper, sometimes Brisbane is cheaper. I know you can't exactly compare apples with apples but I'm just trying to show you an example of why Perth is attractive to buy in. I have met a few people from Sydney, UK, South Africa, England, etc who move here as it's cheap, has great beaches, great trasnport - esp train system. https://www.realestate.com.au/sold/property-house-qld-mount+gravatt+east-137191522
https://www.realestate.com.au/property-house-wa-bassendean-137270034
https://www.realestate.com.au/sold/property-house-wa-bassendean-136660822
I have been looking for cheap property for my daughter since earlier this year and a lot of properties are up $100,000 already. Perth has been different to the rest of Aus where the cheap properties have risen first.

Edit - if I had a million $ though I'd rather buy this property than the Mt Gravatt East property. https://www.realestate.com.au/sold/property-house-wa-ocean+reef-134069938

 

Great charts...pretty summarizes what is happening good houses are selling within days of listing.

 

100%.....that is fanstastic value for money...no where else in OZ in major city can you get this value!