Rob Lamers, head of debtor finance at Oxford Funding, says while few would suggest Australian house prices are in for the large falls they saw during the 1990s recession, the general view is that the property market has slowed.
Speaking after official figures showed the economy had contracted 1.2% in the March quarter, Lamers says during the last recession, major banks reduced funding lines to businesses because property prices fell so significantly.
Dwelling values fell 0.3% in April and are now down 1.5% in the last 12 months, according to the latest RP Data-Rismark Home Value Index.
"Movements in house prices can impact credit," Lamers says. "We're suggesting you be wary of that risk."
"People probably take it for granted that house prices are going to increase by 10% every year."
"If you borrowed more against your property because of that, you should be paying attention."
Oxford Funding, which operates debtor-finance facilities for Bendigo & Adelaide Bank, says start-ups and SMEs should be careful about being over-reliant on housing-related finance, and instead consider a funding line linked to their business.
Lamers admits he would be a winner if business owners are forced to move to alternative funding options.
Australia lags behind the market penetration levels seen in the US and Europe, he says, although the business has reported an impressive 75% growth over the past three years, driven by increased demand during the GFC.
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