Tinkering with lending market won’t build homes Australia needs now

The Liberal-led Senate Economics References Committee inquiry into Home Ownership commenced today, hearing alarming proposals to tinker with Australia’s stable lending market.

 

Among the concerning suggestions was a proposal for an APRA ‘arrears target’ to allow 2-3 per cent of mortgage holders to be in arrears, putting up to 172,000 Australian homeowners at risk of losing everything.

 

Evidence to the Inquiry showed tinkering with prudential settings for the lending market:

• Encourages more competition at auctions from more borrowers, who are borrowing more money, thereby inflating house prices at the worst possible time
• Pushes borrowers to do ‘whatever it takes’ to pay for bigger and bigger mortgages, including going without food
• Introduces unnecessary risk to the financial system
• Misses the overwhelming, obvious, and universally agreed solution, which is to build more homes that people can afford.

 

The only consensus out of today’s hearing was that supply is the answer to addressing Australia’s housing challenges.

 

Quotes attributable to Senator Jess Walsh:

 

“The Liberals don’t have a single policy to build a single home, so they’re scratching around for ideas in all the wrong places. Houses will be more affordable as we build more of them, and tinkering with lending rules is just yet another misplaced and dangerous demand-side policy from the Liberals. It misses the overwhelming and obvious reality. We need to put all our efforts into building more homes.”

 

“The Coalition has no housing supply policy and are working with the Greens to block 40,000 people into buying their first home through Help to Buy. If the Coalition are serious about home ownership, the answers are already in front of them”

 

Wednesday 16 October 2024

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