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Does Australia’s financial regulation need a shake-up to support lending to first-time buyers? The Senate economics references committee will investigate.
The Senate has voted to launch an inquiry examining the impact that Australia’s financial regulation is having on home ownership.
Senator Andrew Bragg, who leads the Senate economics references committee, said that the inquiry would explore ways to reduce lending costs and improve accessibility for first home buyers, with the probe to focus on “people, not institutions”.
Going into the examination, Bragg said he believed the nation could be doing “more to support the aspiration of first home buyers Australians”, and noted that “Australians must be able to have access to a mortgage as a prerequisite for a first home”.
The inquiry intends to report back with options to tilt the scales in favour of first home buyers, through investigating lending practices by banks and private credit, opportunities to drive deregulation, and considering how eligibility barriers to first home finance, such as Higher Education Contribution Scheme (HECS), might be lessened.
Consultation will involve hearing from stakeholders in the associated industries, the Australian public, as well as the Australian Prudential Regulation Authority (APRA).
Bragg, a Liberal senator who also serves as the shadow assistant minister for home ownership, framed the probe as an effort to get institutions to “better serve individual aspiration stands”, which he said stood in “contrast to Labor’s corporatist and big government approach to housing”.
“If the average working Australian loses access to capital for a mortgage to fund their family home, this will cement the intergenerational divide and destroy the Australian dream,” Bragg commented.
The move has so far been welcomed by industry insiders associated with real estate and housing, such as the Housing Industry Association, who called the inquiry “long overdue”.
“Access to finance for a deposit is the biggest obstacle for Australians trying to buy their first home, especially those paying rent while saving for their deposit,” noted HIA managing director Jocelyn Martin.
“Given the current housing challenges, HIA believes that when it comes to getting first home buyers into a home, all options need to be on the table and ensuring housing policies can respond to changes in a timely way should be the basis for all government actions that influence the housing market,” she added.
Recent research from HIA showed that 92 per cent of renting households aspire to own their own home, yet only 49 per cent of those households believed they would eventually achieve the goal.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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