Since the Banking Royal Commission began and uncovered major rorting by the big banks and financial institutions in Australia, the banks tightened their lending.
Now, as lending in the housing market falls below its 10-year average, Treasurer Josh Frydenberg is urging banks to start approving home loans.
Mr Frydenberg believes that it is in the ‘best interest’ of Australian banks to continue to grant housing loans, as the Australian Associated Press reports.
On Thursday, the treasurer told reporters in regional Victoria that he had a message to the banks:
‘So my message to the banks — keep your books open…
‘You have a social and an economic responsibility to ensure affordable and accessible and timely loans to the broader public.
‘It’s in the banks’ interests, it’s in the economy’s interests, and it’s certainly in the public’s interests.’
Frydenberg warns against Labor’s policy to cut negative gearing
Mr Frydenberg’s comments are in reaction to CoreLogic’s most recent Hedonic Home Value Index revealed that in the December quarter national dwelling values fell 2.3%. In terms of quarter-on-quarter declines, this is the worst since 2008.
In 2018, most areas in Australia recorded weaker performances, with national values dropping 4.8% for the year.
The treasurer also said that the Australian Prudential Regulation Authority’s (APRA) involvement in the market has cause the economy to become more resilient, and thus we’ve seen a lift in the market.
Mr Frydenberg has also warned against Labor’s policy to get rid of negative gearing. He said that it would decrease buyers in the markert, AAP reports.
Jason Clare, investment spokesman for the Labor party refuted these claims. Instead stating that removing negative gearing would help first home buyers, telling reporters in Sydney on Thursday:
‘At the moment you get tax incentives or assistance from the federal government to buy your fifth or sixth home…
‘You don’t get that if you’re a first home buyer. We think that’s just plainly unfair.’
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