Many pundits say the market is turning, but others warn reduced borrowing capacity, high-interest rates and soft lending activity will subdue recovery.
after almost a year of price falls and is readying to add to his portfolio of two houses, two apartments and a shared land bank in Melbourne’s western suburbs.
“Borrowing capacity remains meaningfully lower than pre-pandemic, rate cuts are not imminent, and lending activity remains soft,” he says. For example, stable rates did not prevent a downturn from 2017 to mid-2019 after lenders tightened credit availability following the banking royal commission. RateCity, which monitors interest rates, says an owner-occupier with a $1 million, 30-year principal and interest variable loan is paying about 5.49 per cent – about 2.28 percentage points more than a buyer in February 2020.Mousina says: “This limits how much new borrowers can afford, and the expectation of a slowing in economic growth and the rising unemployment rate is not positive for property prices.
New listings increased by about 7 per cent, while old listings greater than 180 days were up by around 5 per cent.
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