Monthly Market Update: Frank Valentic
By | 10th Feb 19

Trends, tips and market insights for February by Frank Valentic.

Investor numbers are definitely down across the board as new home lending is down by 42%.  Investors peaked at 45% of the market back in May 2015 and now investor numbers are only 32% as they are struggling to get loans.  Finance loans are at a higher rate and investors may be hit with some possible new changes to negative gearing and capital gains tax concessions in the future.

The finance world has definitely changed with the Royal Commission results and it is taking much longer for people to get their finance approved.  It is very hard to get finance pre-approval in less than four weeks now.   Brokers will be charging a fee for service and will no longer get remuneration from the banks if the proposed changes get passed on 1st July 2020.   This will have a big impact on the property market.  Banks have been changing the rates independently and many experts predict that there is a 28% chance now that the RBA will decrease interest rates due to the economy’s sluggish growth.  

The market continues to rebound as there have been some solid results.  Antony Catalano paid a whooping $30 million for a penthouse apartment in St Kilda.  Many expects predict that we could see a further 5 to 10% correction and another prediction is that we will the bottom in March/April.  It’s definitely not all doom and gloom because the market has come back about 8% compared to the GFC when the market had come back 30%.  The outer suburbs are definitely kings and performing strongest as are also properties under $600,000 which are being bought by first home buyers.