Housing market

Facing Property Meltdown Frydenberg Urges More Home Loans

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.’

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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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Alana Sumic

Alana Sumic

Alana Sumic is an editor and writer for The Australian Tribune. She has a Bachelor of Arts from La Trobe University and a Masters in Publishing and Editing from Monash University.

She specialises in national and international politics and current affairs. She’s passionate about delivering the unfiltered stories that matter to you, on all topics.

Comments: 2

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  1. The treasurer says the banks have a social commitment to keep their loan approvals going to save the sliding house prices. He should fire a few bullets at the RBA for reducing interest rates to the rediculous levels we still have. Open the Australian banking sector to overseas banks & get some real competition in the sector. The treasurer needs to wean the Aussie economy of housing construction as the mainstay of the economy. Once the house is built there is no further benefit to the economy. Investors would not have to invest in property if interest rates were at a proper level. Who is going to park capital on deposit to get .5%- 2% when you can get double or treble this with property.The state & federal governments need to get out of the housing sector with the grants & other incentives for first home owners which has added fuel to the fire. Government interference in what should be a free market never ends well. What goes up will inevitably come down. Just consider this. If house prices continued to rise in percentage terms like they were in Sydney & Melbourne for say 20 years but our wages did not keep pace how sustainable is that. Get used to it treasurer because the chickens are coming home to roost regardless of what the banks do or the dumb opposition treasurer might say or do.

  2. Josh, it is “free for all” that have brought us to the mess we are digging ourselves ever deeper. When the market becomes directly or indirectly regulated, instead to be left to its own forces, this is what you get. Now you want the banks to just carry with this same problem. To fix a wrong, you do not repeat the original process.