How the Royal Commission is affecting lending practices.
As the Royal Commission into financial services closes in on its half way point, the real estate industry watches closely to see what effect it will have on lending.
At the end of 2017, the Royal Commission into misconduct in the banking, superannuation and financial services industry was established. Since then, there has already been a deep dive into the responsible lending regime and whether financial institutions have been accurately assessing customer’s ability to service the loan.
The real estate industry has been watching the Royal Commission closely to see what effect findings will have on lending. It was anticipated that banks will start to take a more cautious approach to lending by tightening their processes and it has been predicted that there will be an uptake in second-tier lenders. As we close in on the half way point, the spotlight is currently on small business lending. The commission is scheduled to run for 12 months and findings to be released at the beginning of 2019.
On another note, the media continues to report on a cooling property market, but Belle Property auction clearance rates are still tracking above industry standards with offices within our network selling properties well above the reserve price.