Swift buyer uptick off election result in Queensland
Buyer reaction has been swift to the Federal Election result in the Sunshine State, as certainty returns to Queensland.
Delayed contracts were signed and inspection bookings jumped in Queensland just hours after the Coalition was declared the winner of Federal Election 2019, some of the state’s premier agents confirmed.
Vaughan Keenan of Grace and Keenan Newstead, who put a Hawthorne property under contract over the weekend for $3.305m, said the response was almost immediate.
“Sunday morning I had enquiries from people who had been sitting on their hands,” he told The Courier-Mail. “It’s that positivity that there is no change to all the housing policy which gives some relief and confidence to that end of the market.”
“Literally on Sunday five sets of buyers have made appointments to see properties this week. It’s very positive out there now.”
Place Estate Agents head Damian Hackett said there had been “so much uncertainty around how negative gearing, changes to capital gains laws and the general thought of increasing taxes”.
“If Labor had come into leadership, we could’ve seen the biggest changes to the Brisbane property industry in decades. Now, a cloud has been lifted due to this result and there’s more clarity on what to expect,” he said.
Mr Hackett said “with the potential interest rate drop and the loosening of the banks, following requirements that were implemented mid last year, we can expect confidence to return to the property market.’
APRA looks to amend mortgage lending guidance
The prudential regulator is looking at revising its guidance on the serviceability assessments that banks perform on residential mortgage loan applications, giving them greater flexibility to set their own serviceability floors.
Currently, in a bid to limit excessive borrowing in an environment of low interest rates and high household debt, APRA expects ADIs to assess loan serviceability using the higher of either: an interest rate floor of at least 7 per centa 2 per cent buffer over the loan’s interest rate.
However, in a letter to authorised deposit-taking institutions (ADIs) issued today, APRA has proposed removing its guidance that ADIs should assess whether borrowers can afford their repayment obligations using a minimum interest rate of at least 7 per cent.
Instead, ADIs would be permitted to review and set their own minimum interest rate floor for use in serviceability assessments.
“APRA will still expect ADIs to determine and keep under regular review their own level of floor rate, but ADIs will be able to choose a prudent level based on their own portfolio mix, risk appetite and other circumstances,” the letter read.