Property Finance Chess: Plan Your Next 3 Moves, Not Just 1

Borrowing power fell by about 10% for geared investors after the budget changes, while banks began testing borrowers at rates 3% above their actual loan rate. Mark Davis explains why investors who sit on their hands may miss one of Melbourne’s best buyers markets in years. • Prices recorded their steepest quarterly fall on record, down in every capital. • Borrowing power was affected by about 10% for investors with gearing. • Banks initially assessed some negatively geared borrowers at up to 25% less borrowing power. • The serviceability buffer tests an investment loan at approximately 3% above the actual interest rate. • One further rate rise could reduce borrowing power by about $50,000 for someone with $1.2 million in lending. • Mark Davis was named Australia’s most specialised broker, while Australian Lending and Investment Centre won most diversified brokerage. What this means for you: property finance is no longer just about finding a loan or the sharpest rate. The right structure, lender selection and professional team can determine whether you keep moving towards property number three or sit above the borrowing line. Download our no-cost Top Five Markets Report 2026 → https://ripe.house/five-markets Subscribe for more data-led Australian property and investment analysis from Ripehouse Advisory. #AustralianProperty #PropertyInvesting #PropertyFinance #BuyersAgent #MelbourneProperty This video is general information only and not financial or investment advice. Consider your own circumstances and seek professional advice.

prices just had their steepest quality fall on record and most investors are sitting on their hands. In this episode I sit down with Mark Davis from the Australian Lending and Investment Centre, recently named most specialised broker in Australia. We cover what the budget really did to borrowing power, how the bank's 3% buffer works and what one more rate rise could cost you. Then we get into the difference between playing finance checkers and finance checks. Prices have just had their steepest quarterly fall on record, down in every capital. From where you sit Mark in lending, what's actually causing it? So basically what's happening out there is that since the budget, it was no surprise that prices were going to come down because of the the changes and the amount of approvals that were taken away from customers on the night of the budget. So basically the negative year was taken away for servicing which brought all servicing down by about 10% and then that basically made the banks withdraw their approvals so anyone out there ready to go and buy assets. The next two, three, four weeks at auctions actually didn't have an approval so no one turned up so that caused one of the biggest problems. The other side is obviously negative gearing is actually really causing a few issues with with customers out there who think it's not there. Negative gearing is still there it's just not there under the old method where you get a refund each year. It's done in a different way and the other one here is on obviously capital gains tax. A lot of people think capital gains tax is gone, the 50% exemption is gone but there is another way which is the indexation model which it does allow for the gain to be reduced and it is nearly similar to what it was prior but the whole of the public don't actually understand it. So it was a knee-jerk reaction I guess in effect when the bank's throwing people around but in reality from what you're seeing people's upside to investing hasn't really changed if they look at the longer term? It's actually a bit of a facade out there it's like the whole of the country spooked thinking that these changes are there and when when you think that you sit on your hands it's a natural reaction and the actual reality is it can be better if you're fully geared under the new system than the old system which is something that most I'd say 95% of Australians don't understand. And that's probably the theme that I wanted to dig into a little bit today is playing finance chess and not checkers and not being thrown around by the headlines but there have been some segments of the market that have been hit harder I guess than others. The data says the most expensive homes are falling the most and cheaper homes are holding. Why do you think from the finance perspective you could explain that? Well obviously there's less people there at that high level and and the lower end is already it's already low in a lot of cases. I'll give an example Melbourne and I'm not the property advisor you are Jacob from Ripe House and basically in Melbourne that's been flat for eight years on the housing market the apartment market 16 years so it's already been flattening out. So people people come to me and say well when's it going to be a great day and when's the market going to plummet in Melbourne? It's been plummeting on a gradual basis for a long long time with no growth for like I said 16 years in apartments which is an amazing amazing period of time. And t