Adding to the confusion that many are experiencing regarding the current state of the housing market and the reporting of it by the media, one of Australia’s largest credit unions, Peoples Choice, has weighed in. The have announced tighter lending criteria to home loans with tougher scrutiny on household expenses and borrowers spending patterns. However, they have still managed to see an increase in in loan growth by 6 per cent in the first months of the 2018-2019 financial year leading to a more optimistic outlook for the Melbourne housing market.
As well as People’s Choice, the other major banks have all tightened up their lending criteria leading to a belief of a widespread credit crunch being triggered. Steven Laidlaw, Chief executive of People’s Choice, was optimistic on this outlook owning to Australia’s strong economic growth, the continuing low interested rates and high migration rates. Over the three year outlook to 2021 the credit union is predicting Melbourne housing prices to remain relatively flat, but does not believe the stark predictions of 10-20 drop in prices will eventuate.