While some have expressed doubt the recently proposed loosening of lending restrictions will make housing finance easier to obtain for more Australians, others have highlighted secondary factors that seem sure to benefit from the reform.
According to Adrian Kelly, president of the Real Estate Institute of Australia, the relaxed lending guidelines will not only have a positive impact on the housing market, but seem sure to drive consumer confidence up, providing reassurance for those who have held off on listing their properties due the recession brought on by the COVID-19 pandemic.
Kelly said the government’s move would “allow sellers to list their properties knowing the buyers will be out there”, which would put a floor under demand.
“By improving demand, the government is giving prices less chance to fall, meaning the doomsday forecasts can be archived,” Kelly added.
“This is a good signal, even for people in Melbourne. They will know that the current restrictions are not permanent, and this policy change flags better circumstances for sellers and buyers.”
Denita Wawn, CEO of Master Builders Australia, chimed in to express hope that winding back lending regulation would also shorten the length of time it takes to get people into homes.
“We expect that loan applications for borrowers should also become less cumbersome … and it should help streamline the processing of HomeBuilder applications on top of pre-approval processes, which have been adopted in some states,” she explained.
“Access to finance, land titling and planning approvals can substantially delay building of new homes, and measures are needed to remove these impediments and speed up processing of HomeBuilder applications.
“While the announcement should open up access to mortgage finance, we now need state and territory governments to activate their option under the agreement with the federal government to extend the HomeBuilder construction deadline from three to six months, as has already occurred in Victoria.”
For more on this story, check out Issue 17.20 of Australian Broker – out today, 19 October
