Housing demand will begin to slow: ANZ
The ANZ Australian Housing Update for August said housing demand will begin to slow, most notably for property developers and foreign buyers due to tighter lending standards.
Rate cuts from the RBA in May and August, as well as expectation of more easing is driving pressure on mortgage rates.
The report said for owner-occupiers, the average discounted mortgage rate is now the same as before these macroprudential measures were implemented.
"We continue to expect that demand for housing will ease from here, driven by tighter lending standards, especially for property developers and foreign buyers," the report said.
"A number of major lenders have either exited the foreign investor segment of the market or have made a variety of adjustments, including requiring foreign buyers to hold a larger deposit and reducing the amount of overseas income when calculating the ability to service a loan.
"Construction activity is also expected to moderate. Building approvals remain below last year’s peak, suggesting that the rapid growth in starts and work done is unlikely to be sustained. However, a tremendous backlog of work will continue to support construction around record levels.
"In fact, the large backlog of construction work presents a risk of oversupply emerging in some markets. Significant additions to the supply of apartments are forthcoming in Brisbane and Melbourne, raising fears of settlement risk and eventual price declines."
