Australian lenders have tightened serviceability rules for property loans. Interest rates are expected to settle around 4.5-5%, higher than the 2.93% low during COVID, reshaping how investors assess borrowing capacity.
One of the big fundamental shifts has been in the world of certainly serviceability and obviously also in the cost of real estate, right? These are some of the big things. Where we're at right now is actually quite normal to me because this is where I started in the world of property investing at this type of interest rate, right? Then we kind of went heavily down and we came back up again and we've gone like, we went down and then we come back up again, right? Went down during COVID come back up again. And guess what? We're going to go back down again. Do I think we're going to be down at 2.93%? No, I don't. I think we're going to be sitting at 4.5% to 5%. I think it's where we're going to be settling. But interest rates have certainly changed a lot over time. They've gone up and they've gone down, but the pricing of property has continued to march up in a strong, strong way. And we've also got serviceability. So the world of lending and finance, I would say that's probably one of the biggest fundamental shifts.
