New research released by legal technology and services provider GlobalX has revealed that 67 per cent of property lawyers and conveyancers believe buyers are over-capitalising and leaving themselves at significant risk, with 60 per cent warning Australia is experiencing a “property bubble”.
“Housing affordability is a generational problem in Australia, and with 65 per cent of respondents indicating housing is now unaffordable for Australia’s middle class, we need to look at ways to rectify this escalating issue,” GlobalX chief executive officer Peter Maloney (pictured) said.
However while the majority believe a property bubble is being felt by the Australian market, the research has found that property lawyers and conveyancers are divided on how to rectify the issue.
According to GlobalX, one recently proposed solution that has caused great debate is the suggestion that young Australians should be able to dip into their superannuation for property investment.
“Like the political divide, the industry is also split on this issue, with 54 per cent of conveyancers and property lawyers disagreeing with the proposal, and almost 46 per cent championing the idea,” Mr Maloney said.
“There is no one solution that will suit everyone’s agenda, desires and position on this, so we need to focus on ways to reduce over-investment to avoid devastation and crippling debt if – and/or when – the property bubble bursts.”
Property lawyers and conveyancers also appear divided on overseas investment into Australia’s property market.
“When looking to overseas investment as an indicator of increased competition and higher pricing, 42 per cent of conveyancers and legal professionals believe the level of foreign investment will increase,” Mr Maloney said.
“We also asked whether Australia should ban foreign investment to help ease housing pressure and received some polarising results.
“Around 47 per cent of respondents wanted to see foreign investment restricted, while 52 per cent did not see a ban as a viable solution.”
However, despite the confliction, Mr Maloney pointed to new CoreLogic data which suggests that performance in Australia’s regional housing markets is set to remain mixed, but is expected to cool across the board from 2018 onwards.
Mr Maloney noted that industry professionals were eagerly awaiting the next federal budget to see how the government would respond on this issue.
“New South Wales has been vocal in its support of addressing this issue, and we are now waiting to see how this will be addressed on a federal level, or by other state parliaments,” he concluded.
Mr Maloney appeared recently on The Lawyers Weekly Show, a podcast dedicated to discussing issues, trends and exciting activity in the business of law.
In this podcast, Mr Maloney discussed automation and innovation in law and conveyancing, and revealed key insights from GlobalX’s annual law technology survey, uncovering the tech trends affecting contemporary law firms now and into the future.