Borrowing Beyond the Brink: What’s Keeping the Lending Market Afloat?

Over the past year, interest rates have surged at an unprecedented pace, leaving borrowers who once enjoyed the luxury of sub-2% rates now grappling with interest rates hovering around 6% for their mortgages. The impact is so noticeable, it's creating immense pressure on existing borrowers and significantly curtailing the borrowing capacity of newcomers. The question that emerges is, "how is the lending market surviving in the face of such adversity?"

One might expect a flood of distressed property sales and a sharp decline in property prices and yet surprisingly, that's not the case. Distressed sales are somewhat scarce, and property prices, in some markets, continue to rise, which then raises a fundamental query: "what's keeping the lending market afloat?"

In this episode, we're joined by Daniel Gold of Long Property to uncover the intricate dynamics at play in the lending market. We explore the factors contributing to borrowers' resilience in managing higher repayments and the ability of many to still access finance. The lending market, as it turns out, is a complex ecosystem with numerous layers, and we're here to help you unravel it. So, let's get started!

Episode Highlights:

00:00 - Introduction

01:28 - Who is Daniel Gold?

02:15 - How resilient has the property market been since 2022?

03:17 - How are people still managing to access the money required for property purchases?

05:27 - Is there a notable shift in intergenerational wealth transfer?

08:41 - Are second-tier lenders benefiting from interest rate trends?

10:49 - How are different types of clients coping with higher interest rates?

12:46 - Differences in responsibilities and regulations between banks and other types of lenders

18:58 - What's the impact of the new 1% buffer policy on refinancing?

28:19 - Potential challenges of younger borrowers investing in the Sydney property market

33:46 - What’s the impact of the rental crisis on investors?

37:58 - How effective are housing reforms in addressing supply issues?

43:12 - How are clients responding to recent changes in the holiday home market?

50:50 - Are people upgrading their properties more frequently?

52:37 - What are the reasons behind the market's willingness to invest?

54:09 - The complexities of buying and selling real estate in a competitive market

55:47 - Daniel Gold’s property dumbo

About Our Guest:

Daniel Gold runs the business Long Property and he’s one of the top mortgage brokers in Melbourne. He has been selected as a finalist for best residential broker and broker of the year at the main industry awards for the past 3 years in a row. He specialises in providing a high-end service predominantly to professionals and self employed clients.

Connect with Daniel Gold:

Check out Daniel Gold’s blog here: https://longproperty.com.au/doing-well-in-real-estate-lessons-from-our-top-clients/

Connect with Daniel on LinkedIn: https://www.linkedin.com/in/danlgold/

Visit their website: https://longproperty.com.au/

Check out Daniel Gold’s book: https://www.amazon.com/Long-Property-Daniel-Gold/dp/064829952X

Resources:

Visit our website https://www.theelephantintheroom.com.au

If you have any questions or would like to be featured on our show, contact us at: The Elephant in the Room Property Podcast [email protected]

Looking for a Sydney Buyers Agent? https://www.gooddeeds.com.au

Work with Veronica: https://www.veronicamorgan.com.au

Looking for a Mortgage Broker? https://www.blusk.au

Work with Chris: [email protected]

Enjoyed the podcast? Don't miss out on what's yet to come! Hit that subscription button, spread the word and join us for more insightful discussions in real estate. Your journey starts now!

Subscribe on YouTube: https://www.youtube.com/@theelephantintheroom-podcast

Subscribe on Apple Podcasts: https://podcasts.apple.com/ph/podcast/the-elephant-in-the-room-property-podcast/id1384822719

Subscribe on Spotify: https://open.spotify.com/show/3Ge1626dgnmK0RyKPcXjP0?si=26cde394fa854765

See omnystudio.com/listener for privacy information.