The Morrison government is calling on the banks to free up credit in 2019, as some cities experience GFC-style price dives.
Deputy leader of the Liberal Party Josh Frydenberg urged banks to keep their books open, in the interest of access to finance for housing and economic growth and stability.
“Now that APRA’s interventions have been wound back it is vitally important that the banks continue to provide affordable and timely access to credit particularly as housing credit from banks has fallen to 4.4 per cent compared to its 10 year average of 8.1 per cent,” Mr Frydenberg said in a statement.
APRA, the banking regulator, has lifted its cap on interest-only lending. The cap saw interest-only loan approvals plummet across Australia, and most lenders operated well below the prescribed 30 per cent limit.
Mr Frydenberg used softening house prices as ammunition to hit out at Labor’s plans to curb negative gearing.
“This is not the time for Labor’s disastrous new housing taxes which independent experts declare will damage market confidence and weaken investor demand,” Mr Frydenberg said.
“The major credit rating agencies have warned of the negative consequences to the broader economy from a sharp fall in house prices which could stem from a larger pullback in investor demand putting at risk our AAA credit rating,” he said.
“As Treasurer, new ALP president Wayne Swan labelled changes to negative gearing as ‘economically disastrous’. It is as true now as it was then,” he said.