We must build more homes, not more debt

The Senate Economics References Committee inquiry into Home Ownership continued today, with unanimous agreement from banks, regulators, and consumer groups that boosting housing supply is the best way to help Australians buy their first home.
The Albanese Government has committed $32 billion over the next decade to increase housing supply.

 

In contrast, proposals calling for relaxed lending standards would only push first home buyers to take on more debt and risk, without building a single new home.
Allowing borrowers to borrow more and lenders to lend more is a reckless, short-term concept that puts those least able to afford it at risk.

 

Banks, regulators and consumer groups made clear:

• We must build more homes, not stoke demand
• Our lending settings are appropriate and balanced to ensure that mortgage holders do not take on debt and risk they can’t afford
• Housing credit is growing, and lending to first home buyers is in line with long-run average share.

 

Proposals suggested so far would:

• Not build a single new home
• Pit first home buyers against existing borrowers, forcing existing borrowers to face higher costs
• Reduce current protections for home buyers, exposing them to financial risk they can’t afford
• Allow over 100,000 people to fall behind on their mortgage, with devastating personal and economic consequences.

Quotes attributable to Senator Jess Walsh:
“To make housing more affordable, we need to build more homes. That’s the overwhelming, unanimous view from today’s hearing”.

“We want first home buyers to move in with confidence, not outsized debt and distress.”  

Quotes from the Public Hearing (24/10/2024):
Mortgage Stress Victoria, Nadia Harrison, CEO:

“There is not a shortage of housing credit, there is a shortage of affordable housing. Housing credit grew by 5% last year and 4.5%.”

Commonwealth Bank, Angus Sullivan, Group Executive, Retail Banking Service:

“If we had 100 units of effort to deploy, we would put 98 for solving the supply strain.”

Australian Banking Association, Chris Taylor, Chief of Policy:

“The best way to increase affordable housing is by implementing policies that will increase supply.”

National Australia Bank, Andy Kerr, Executive, Home Ownership:

“Focusing on supply is essential to addressing the root cause of imbalance in the property market and helping first-time buyers.”

“We think the biggest problem to solve is supply and we would be cautious about pulling demand side levers if they were not complemented by a supply side intervention in parallel”

Westpac, Martin Green, National General Manager, Property Finance:

“If we further loosen standards from where we are, you will only increase the burden on borrowers and increase their stress”

Media contact for Senator Walsh: Riley Geary – 0402 261 235