Last month, I wrote a story about a surprise decision in the Federal Court concerning the way Westpac was applying the Responsible Lending Rules between November 2011 and March 2015.  To read the full story, click here.
 
To recap the judge decided that he would not accept an ASIC argument concerning how Westpac estimated current living expenses and ability to repay a loan. In his summing up he gave one of the more memorable real world reasons for his decision.
 
I may eat Wagyu beef every day washed down with a fine Shiraz but, if I really want my new home, I can make do on much more modest fare.
 
APRA had 28 days to appeal the decision, they have appealed it but it seems like the Caravan has now moved on.
 
The Reserve Bank is talking about dropping it  interest rate again in which case they will be below 1% and mortgage rates should also drop again.
 
Couple that with the changes the prudential regulator APRA has made to the serviceability buffer on mortgages dropping it from 7% to 2.5% above the borrowers variable mortgage rate and the housing market is being opened up to a lot of pent-up demand.
 
Applying the new rules Ratecity has estimated that a family earning a household income of $109,688 would be able to borrow up to $60,000 more if their loan was assessed at 6.25% instead of 7.5%.
 
Their analysis suggested that a single person in the same scenario may be able to borrow an extra $50,000.
 
This is already showing up in the Southern Gold Coast market wherehouses priced around $500,000 to $600,000 which is now entry-level, are walking out the door with anywhere between 10 and 15 couples at the first open house.
 
If you are thinking of selling and would like to see where the current market is, not the January market, give us a call.
 
Alternatively you can download a current suburb report here!