Economists at major Australian lender ANZ say housing will contribute less to the nation’s economy as a result of stricter lending around property development and foreign investment, reports www.realestatebusiness.com.au.
Although housing has been a key driver of the Australian economy over the past two years, economists say the slowdown will be driven by tighter lending standards on key borrower segments.
“Tighter lending criteria and significant additions to the supply of housing are likely to result in slower growth in both construction activity and prices through the remainder of 2016 and into 2017,” they said.
“As such, our view is that the contribution to the economy from the housing sector is set to ease.”
This could have a serious flow-on effect for property portals. Of note, earlier this month Deutsche Bank's Equity Research Australasia Division recommended investors sell their REA Group stock after FY16 results were behind its forecasts.
Deutsche Bank said the weaker results reflected subdued listing volumes towards the end of the quarter and increased marketing spend in the domestic operations.
ANZ strategists said there had been significant changes within Australian market.
“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,” ANZ’s representatives said.
“On the policy front, the states have announced additional taxes on foreign buyers in their respective 2016-17 budgets. New South Wales introduced a 4 per cent stamp duty surcharge for foreign buyers, who will now also pay an additional 0.75 per cent land tax surcharge.
“Victoria expanded its foreign stamp duty surcharge from 3 per cent to 7 per cent, while Queensland introduced a 3 per cent stamp duty surcharge for foreign buyers.”