Domain Newsletter

Domain Charter News

Banks tightening their lending criteria

With reports that 2010 will be driven by continued population growth, further expected interest rate hikes and ongoing recovery from the GFC, the financial sector is tightening its lending policies to ensure their risk exposure is far less than previous years.

This will result in even less first home buyers entering the market, fueling a greater rental demand and ultimately adding to an already chronic housing shortage.

The HIA and REIV along with most industry analysts believe, house prices will continue to grow due to the demand of not only the rental sector but also the continued influx of migrants and up-graders.

Banks have already flagged that they’ll require greater equity levels, higher interest rates expected and increasing demand as we move through 2010.

Industry experts believe and are urging that those contemplating entering the residential investment market that are in a position to do so now but holding off to later on in the year, may not be able to if they don’t do it now.