If you are in the market to buy or sell a house, you will have been watching property sales with interest and, in many cases, astonishment. Prices have hit extraordinary highs. The big question on everyone’s lips: will it slow?

The short answer: probably not soon, but tighter rules around lending may be on the horizon, and that might pump the breaks a little.

Demand has far outstripped supply, and will continue to do so as we enter the peak selling season of 2021. Total listings fell 25.9% during the past year, with Sydney, Hobart, Adelaide, Canberra and Brisbane posting the largest declines.

Leading property market reporting firm, SQM Research, indicates that more stock will come in October and November, but the strong demand is unlikely to slow down the price growth momentum.

The housing boom is not limited to metropolitan areas as it typically has been in the past. The regions have experienced incredible growth. So much so, that a Regional Housing Taskforce was formed in July to investigate “challenges and barriers to housing supply in the NSW planning system” and recommend how better outcomes could be achieved.

Driven by higher house and rental prices in the major cities, and an increasingly flexible and remote workforce, many buyers have been looking for a tree or sea change, bumping prices in areas like the Central Coast up in ways never seen before.

According to CoreLogic (suppliers of property data formerly known as RP data), house prices in regional NSW rose 26.7% in the 12 months to the end of September compared with a 23.6% rise in Sydney

So how can a buyer, especially a first home buyer, expect to crack the market? Well, apart from continuing to save for the deposit, perhaps keep one eye on lending. There are murmurings of alternative controls over spiralling debt levels.

Money is cheap to borrow at the moment. The Reserve Bank of Australia board has kept the cash rate at a very stable and record low, while maintaining there will not be a rate rise before 2024.

The Australian Prudential Regulation Authority (APRA) data for the June quarter showed 21.9% of new loans went to borrowers with debt that outweighed their income by more than six times, compared to 16.1% a year earlier.

The Council of Financial Regulators, which includes the RBA and Australian Prudential Regulation Authority, has been discussing possible macroprudential policy responses or lending restrictions. There is industry-wide recognition that current borrowing and debt levels are unsustainable and unachievable for many Australians. APRA plans to outline its framework for implementing macroprudential policy over the next couple of months.

So, with the answer to our question over whether it will slow is to watch this space, you can still take positive action now. Property is often the biggest investment in person’s lifetime, and can be quite an emotional one. We all know we shouldn’t mix money and emotion, so it’s sensible to seek professional advice about the property and finance market well ahead of any intention to buy or sell. That way, when the right opportunity pops up, you’re ready to strike. If you’d like to talk to our Financial Services team about property as part of your overall financial strategy, please email [email protected]