- Article by Online Contributor
The Federal Government has given a boost to economic recovery post-pandemic by removing restrictive lending requirements for finance lenders, including mortgage finance.
Denita Wawn, CEO of Master Builders Australia said, “We commend the Federal Government for winding back regulation to a more reasonable position that allows the market more flexibility to approve housing finance. We hope this means that banks will reconsider their loan to value ratios (LVRs) to help people overcome the deposit gap.”
“We expect that loan applications for borrowers should also become less cumbersome,” she said.
“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,” Denita Wawn said.
“It is good to see the Federal Government is giving banks flexibility to deal with applications on a case by case basis which should result in lenders providing mortgage finance to more people,” she says.
“It should help streamline the processing of HomeBuilder applications on top of pre-approval processes which have been adopted in some states. All states and territories should adopt these pre-approval processes,” Wawn said.
“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 today’s 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,” Wawn explains.
“This will ensure that the economic stimulus provided by HomeBuilder can be maximised to save more tradie jobs, and give more people access to the opportunity HomeBuilder provides.”
Earlier this month, Master Builders Australia called for a consensus to deal with the tension between the health and economic impacts of the virus.
Lead photo by Yoko Saito.