Credit availability has emerged as the biggest headwind impacting Australia’s residential markets. The scale of price correction underway/emerging in Sydney and Melbourne is being amplified by tightening credit availability and the snowballing impacts on market confidence.
That being said, there are other uncertainties heading into 2019 which could further muddy the waters as the year progresses, particularly in markets where price correction is already entrenched. Key are:
- the findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and, more importantly, how banks and other lenders react to these findings in terms of lending policy and therefore credit availability;
- the looming Federal election, and with a change of government appearing possible, how proposed changes to negative gearing and capital gains tax concessions will impact; and
- any changes in Australia’s overseas migration intake and related policy.