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On Your Side Investments founder Mike Harvey is forecasting Brisbane property prices to grow by up to 70 per cent over the next three years in response to tighter credit.
“It’s clear the onus on banks to verify income and expenses is going to slow the process down and make it more onerous for buyers wanting to get a loan,” Mr Harvey said.
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“The downside is the extra costs to banks are likely to be passed on in the form of higher interest rates.
“No doubt with tighter servicing requirements, we are going to see less loans and fewer houses being built. Funnily enough, that will have a counterproductive role in the housing affordability crisis, as with our strong population growth, demand will increase, leaving only one way for rents and house prices to go.”
Mr Harvey believes this means cities which have previously been overlooked will have a boom in new house buys, with frustrated younger buyers moving in.
“We are already seeing a greater influx of people selling off in Melbourne and Sydney and taking the extra equity and buying in Brisbane for half the price and enjoying a better lifestyle,” the founder said.
“There’s an increase in demand for Brisbane properties much like there was for Sydney and Melbourne before their boom phase, so we can fully expect a 40 per cent to 70 per cent increase in Brisbane house prices over the next three to four years as Brisbane does what Brisbane always does.”
While cities like Melbourne and Sydney are “always going to be good places to invest” because of their size, population, infrastructure, business hubs and tourism, Mr Harvey said that other cities are now starting to gain momentum as a result of external factors such as the royal commission.
