The federal government announced a big win for would-be buyers in Australia — it plans to overhaul the restrictions that have hindered many home buyers from accessing finance.
Federal Treasurer Josh Frydenberg said while credit has become cheaper due to the low interest rates, many would-be borrowers are still prevented from accessing finance due to tight regulations.
"The flow of credit will be absolutely critical to our economic recovery. But our current regulatory framework, with respect to lending, is not fit for the purpose. It has become overly prescriptive, and responsible lending has become restrictive lending," Frydenberg said in a statement to the media.
Graham Wolfe, managing director of HIA, said the government's plan would allow millions of dollars to be injected into the economy at a time when Australia needs it most.
"Currently it is three times harder for a first-home buyer to get a loan, despite low interest rates making it being easier to service a mortgage. It’s only fitting that lenders and customers have their hands untied to work together to appropriately assess the risk and the loan," he said.
Denita Wawn, CEO of Master Builders, said the move has given the rebuilding of the economy a big boost.
"We expect that loan applications for borrowers should also become less cumbersome. The Reserve Bank has already flagged that the tighter regulatory provisions have been holding back credit growth and some banks have acknowledged that they have been forced into being overly conservative," she said.
Adrian Kelly, president of the Real Estate Institute of Australia, said this move reduces the cost and time for consumers and businesses to access credit.
"It’s important we ensure there are minimal to no obstacles for those wishing to list their properties. This will allow sellers to list their properties knowing the buyers will be out there. By improving demand, the government is giving prices less chance to fall, meaning the doomsday forecasts can be archived," he said.
Collections: Mortgage News
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