APRA credit squeeze victim Nathan Birch sees stagnate property markets in 2018
The young high flying Sydney investor Nathan Birch has given his mildly bearish property predictions for 2018.
"We are entering into a period of uncertainty," the face on Binvested forecast.
"Tighter lending regulation from APRA has made it difficult for buyers all over Australia to get finance.
"This has meant fewer buyers across all markets," says the young investor who knows just what it is like to seek finance and to sell in tightened circumstances.
Birch recently confirmed he had "briefly" fallen behind on "one or two mortgages" citing increased lending restrictions arising from the much-heralded Australian Prudential Regulation Authority investor crackdown.
He predicts it is likely the market will stagnate over the next 12 to 18 months.
"But, despite what the general population may think, this is excellent news for investors especially for those who are cashed up and finance ready.
"This year will be an excellent time to buy."
"While many are finding it difficult to get finance, those who are ready to pounce will have the opportunity to pick up properties for cheap."
He suggests the next 12 to 18 months will offer a "small window of opportunity" to buy properties that are ‘on sale’, before the market picks up speed again.
He says it was the type of market that he built my foundation portfolio on back in 2004 to 2009 as having fewer people buying properties, "it becomes easier to negotiate a good price."
"Vendors become more flexible with the amount they are willing to accept, because at the end of the day, they need to sell.
"If they want to sell, they have to settle for less."
Birch's opinion is that rates will continue to remain low over the next 12 to 18 months, unchanged for some time.
"The banking system is currently in unchartered waters. If the RBA was to increase the cash rate now, millions of Australians would find it difficult to repay their mortgages.
"This would have a flow on effect; with less consumer spending causing damage to the economy.
"The APRA changes have done what a rate rise would normally do – without causing financial strain for those with existing mortgages."
