More than 50 per cent of survey respondents expect finance availability to worsen in the year ahead, compared with just 10 per cent expecting it to improve. ANZ Research expects the broad credit environment is likely to worsen before it gets better.
The ongoing implementation of Comprehensive Credit Reporting (CCR) will give lenders greater visibility around borrowers’ debt obligations and likely weigh on people’s borrowing power. The final report from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Sector (due February 2019) also presents some down-side risk to the credit outlook.
With this challenging backdrop, it is little surprise firms are pessimistic on the outlook for housing prices and construction.
One important point to keep in mind, though, is the pessimism is mostly centred on New South Wales and Victoria. Of the respondents operating in the residential sector in New South Wales and Victoria, a net 76 per cent and 64 per cent respectively expect housing prices to fall next year.
There has been a sharp downward shift in sentiment in the ACT but for the country as a whole, only 34 per cent expect housing prices to fall.