The National Consumer Credit Protection Act has come under scrutiny, with industry pundits arguing the new laws will negatively impact both buyers and sellers.
RE/MAX WA managing director Geoff Baldwin is concerned that the newly introduced NCCP Act will negatively impact any borrower over the age of 35, and could potentially impact those who are selling to upgrade.
“Effectively the new responsible lending obligations on banks and brokers depict that a borrower should have the capacity to repay the loan in full at retirement age without selling their owner occupied property,” Mr Baldwin said.
“These changes mean that a borrower aged, say 55 can no longer take out a loan over 30 years but will be restricted to a much shorter term unless they can demonstrate that they will have superannuation or other assets they can sell to finalise the loan at retirement.”
According to Mr Baldwin, the impact that these legislative changes could have to the property market has been totally underestimated.
“There has been little or no public education or communication to ensure people are aware of how they may be affected,” he said.
“Obviously this would mean much higher repayments and in many cases it will disqualify people and exclude them from the market.”