Property investors should prepare for macroprudential measures: Pete Wargent

Macroprudential measures are likely to feature in the property market cycle, according to Pete Wargent, co-founder of BuyersBuyers.com.au.

“Although there are a lot of variables, property investors should be aware that if activity accelerates sharply then the market regulator is quite likely to step in," the buyers' agent said.

"We recommend that investors prepare accordingly” Mr Wargent said, adding the timing and extent of measures are unknown.

Wargent said investors need to be aware of the potential for changes to lending standards.

"It will be substantially harder to get a loan," he said.

"We know from recent history that the regulators won’t want investor lending to run too hot, so it makes sense for investors to prepare accordingly rather than be surprised by restrictions as and when they do happen”.

Doron Peleg, CEO of Riskwise Property agreed that macroprudential tightening was a likelihood during the current cycle, as low mortgage rates encourage a surge in property investment.

“Based on our analysis and previous events (particularly the measures implemented in 2017), the likelihood that such measures will be implemented within the next 12 months is relatively high” Mr Peleg said.

However, Peleg pointed out that at this point of time there are only indications regarding the nature of these measures being a combination of: 

-changes to the 'floor assessment' rate at the individual loan level;

- LVR restrictions or caps at the portfolio level

-potential debt-to-income (DTI) ratio restrictions at the portfolio level. 

“Since recent cycles have suggested that property investor activity tends to amplify the property market cycles, it is likely that credit restrictions would significantly stymy growth, if not cause the market to stall or decline moderately” Mr Peleg said.

BuyersBuyers.com.au, an IT marketplace connecting homebuyers with buyer’s agents, was co-founded by chief executive Doron Peleg and chief operating officer Pete Wargent.

Peter Meek, formerly managing director of Chobani holds a board advisory role.

The board announced the completion of its Series A funding round which will help the the platform's leveraging Artificial Intelligence (AI) and Machine Learning (ML).

Crevan Murphy of tech firm SafetyCulture and will assist with advisory on technology and product development.

The investment round was led by George Barnett of Atlassian.