The real estate industry in any part of the world reacts to certain conditions and the prices skyrocket or dive or remain stagnant accordingly. The scenario is not very different when you have to buy a property in Zetland or any other suburb of Sydney. The availability of property finance and how desirable it would be for an investor or homebuyer will also depend on several factors, most of which are the same as those affecting the real estate industry in the first place.
The primary factor that determines the property prices and the availability of property finance or the terms of the loan would be the supply and demand. When there are too many properties and very little demand, you would not only have dwindling property prices but banks would be racing to your door to offer you a loan, often at amazing rates. When the demand is high and the supply isn’t enough, the scenario is exactly the opposite.
Then there are scenarios when certain micro or macro level changes have a direct impact on property prices and property finance. One for instance is the rampant purchase of properties purely for the purpose of investment. This spikes up the property prices, creates a shortage of properties and eventually impairs the ability of people to buy homes who would be actually living there.
Such a scenario has been developing in Sydney and certain suburbs over the last three to four years. You may have observed that the real estate prices in Sydney and surrounding suburbs have shot up lately. There is no huge gap in demand and supply but investments in properties have been up and there is a sentiment that is driving up the prices, which many are calling a bubble. It could be a temporary bubble or prices could remain where they are. Regardless of that, the present propositions by the banks are making it difficult for investors to get property finance in suburbs such as Zetland.
Banks have started charging a higher rate of interest for those who would be buying properties for investment and not to stay in them. Many have criticized this step and have aired their views in favor of government taxing the surcharge instead of banks increasing the rates by as much as 0.2% to 0.5%. This may not have a direct bearing on the homebuyers as they continue to pay lower rates of property finance but the trouble is that such measures by the banks have not really deterred the interests of investors. Naturally, properties are being grabbed by those who can afford and the high prices are likely to sustain for a while.
YNM Real Estate
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