Updates on Property Market Condition in Melbourne
There have been talks about the property market condition in Melbourne. Concerns were raised regarding purchasing the property because of stricter regulations. There are also some concerns about home loan approval and seems like it has affected a lot of potential buyers. Latest reports say there is an increasing number of cautious home buyers in Melbourne because of how it seems to be harder now to purchase a property.
As mentioned previously, the royal commission into banking made a lot of changes when it comes to approving loans for potential buyers. Because so many things have happened that are not particularly positive for a lot of banks, the government had to make sure that this sort of irregularities will not happen again. In the past, approved home loans could easily be received. Documents and background checks were not as tight as before, which made a huge impact on the number of loans approved that led to stronger property market condition. Currently, banks are giving out the message that they will allow potential buyers to borrow money but under strict valuation. This very situation has made a lot of people who are looking into buying their own residential property to think twice, or worse run away.
Experts are now saying that any buyer that is showing interest are now subject to finance.
A lot of buyers now are being scrutinized whether they are capable of making a property purchase. Particularly, banks look closely whether a potential buyer has a stable income. Full-time employment is one of the considerations that will be taken into account and if you can prove that it is stable enough, then you would have an easier time. However, this is not the only factor when it comes to approving home loans.
According to reports, out of all the types of buyers, entry-level ones seem to be affected the most. Because of the stricter requirements, it is harder for the first-timers to complete purchases. Fortunately, the second timers will most likely be able to complete their purchase, however, it has been said that it’s actually for those purchasing the $700,000 to $800,000 range. Because of the events currently happening, banks have become more hesitant in approving loans and lending money that goes beyond what the property is actually worth. Apartments are currently more in demand now, especially to those first-time buyers. Younger people are also looking into buying their second or third purchases but it’s been said that this is the very generation that is more cautious. However, conditional offers are no longer encouraged unlike in the past rather, they are told to sort out their finances first to be able to complete any purchases they are planning to do.
Experts continue to suggest that auctions are the way to go because of many reasons. One is that it is an unconditional sale. Simply put, if you are struggling to find your buyer because of these concerns, as an agent, you will need to try anything that is plausible.