The big question for buyers in the wake of the Royal Commission's final report was whether the report would make any recommendations that would make buying a house even more difficult.

Here's what the recommendations mean for home buyers.

Will it be harder to get a home loan?

A big issue that was flagged before the Royal Commission started was how banks assess would-be homebuyers for a loan. 

Since last year, however, major banks and other lenders made changes to loan applications to verify the income and expenses of applicants to make sure they could afford to repay their loans.

Getting a home loan was already much tougher before the Royal Commission. Commissioner Kenneth Hayne recognised this and ended up recommending no changes to responsible lending laws. 

Founder of McGrath Real Estate, John McGrath says the banking royal commission's final report says current rules for loan assessments by the banks are adequate, they just haven't been followed or enforced properly.

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Pictured: John McGrath. Image supplied by McGrath.

"The report noted that the banks have already begun to address this and have made substantial changes to meet their obligations," Mr McGrath said.

"How this translates to today’s buyers is that credit will remain harder to get. The bar has been shifted and we need to get used to it. The era of easy credit is over and this is good because it will help ensure the long-term stability of both our property market and the economy as a whole.  

"I see the role of mortgage brokers becoming even more important in helping customers navigate what will now be a longer and more detailed process."

Property Investment Professionals of Australia (PIPA) Chairman Peter Koulizos says he doesn't think it could possibly get any harder to "pass the forensic tests banks expect you to pass to get a home loan".

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Pictured: Peter Koulizos. Image supplied by PIPA.

"The percentage of loan approvals that are currently being refused is unbelievable. In December 2017, it was 8 per cent of all loan applications that were refused. In December 2018, it skyrocketed to 40 per cent. And now it is creeping up to 50 per cent!

But he says it will be harder in other ways to get a loan.

"It won't be as easy to access all the choices and then determine the best loan available for your circumstances. At the moment, you can go to a mortgage broker who will analyse the home loan products from up to 27 lenders.

"If mortgage brokers are forced to leave the industry and people have to find their own loans, I can't imagine they will approach 27 different lenders and analyse the results."

Mortgage brokers will now need to act in customers' best interest

It's something they should have always been doing, but the royal commission identified several instances where mortgage brokers weren't doing so.

In his final report, Mr Hayne pointed out a conflict of interest between mortgage brokers recommending loans and the banks paying them. As brokers get paid a percentage of the loan amount, they make more money if the borrower takes on a bigger debt.

"There should be no conflict of interest in any industry, but particularly in property where transactions are measured in the hundreds of thousands and millions of dollars," Mr Koulizos told WILLIAMS MEDIA.

"One way to help eliminate the temptation for any conflict of interest is to standardise commissions. In other words, it doesn't matter where the loan is sourced from, the commission will be the same.

"The amount of commission will only depend on the size of the loan, not the lender. Then the mortgage broker should only be focused on comparing the attributes of the loan e.g. application fees, establishment fees, valuation fees, monthly fees and of course, interest rate."

Loans will not become cheaper

"With less competition and realistically fewer choices available to consumers, loans will not become cheaper," Mr Koulizos said.

"We need to keep competition within the lending environment otherwise loans and other banking and finance products will not become cheaper or better suited to consumers."

Banks can currently still pay mortgage brokers commissions, though now that trail commissions have been banned, it will be far less.

Some analysts say it's possible the banks could pass these savings on to borrowers, but the more likely result is that mortgage brokers will raise their upfront fee.

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So with all that in mind, here are the key factors that buyers of all stages need to take into consideration.

First-home buyers

First-home buyers are in a "unique" position to do so this year and are likely to see increased support from their banks, Leonard Teplin, director of Marshall White Projects said.

"A confluence of various market factors has created a perfect storm that for a limited time, gives first home buyers a distinct advantage in the market. Those looking to buy off the plan will benefit from the stamp duty concessions implemented last year, while also facing less competition from conservative investors."

Established home buyers in Melbourne are set to reap the rewards of a 7.2 drop in house prices.

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"This means their money will go a lot further and they can look at upgrading to an extra bedroom or a nicer suburb with the same budget," Mr Teplin said.

If you're under the age of 30, Mr Teplin says you've "never seen a market like this before and probably won’t for another 30 years once prices start to rise again next year".

Second-home buyers

Savvy second and third-home buyers will find they have the luxury of choice and will find properties of good value.

"That said, the upcoming reforms will likely see even tighter lending restrictions for a while. Buyers will find it tougher to extend credit and take out a loan, however banks still want to lend and interest rates are historically low, so if your finances are in order it’s a great time to buy an additional home or upgrade."

But buyers can expect their budgets to be sifted through with a fine-toothed comb, according to Mr Teplin.

Investors

Mr Teplin says patience will be key for investors in the wake of the royal commission.

"Heavy-handed intervention of regulators could cause some roadblocks for investors, however, banks will be eager to lend so as long as you have solid credit and equity. With a bit of patience, the payoff will be worth it," Mr Teplin said. 

Related reading:

Royal commission highlights drastic need for property investment advice regulations

What will the banking Royal Commission mean for real estate?

Banking royal commission findings: no directive to further tighten lending