Master Builders Australia has said that recent lending changes are set to provide a big boost for home ownership and bolster economic recovery in the process.
Denita Wawn, CEO of Master Builders Australia, sais the federal government has “given the rebuilding of the economy a big boost by removing overly restrictive lending requirements for finance lenders, including mortgage finance”.
“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 to help people overcome the deposit gap,” she said.
“We expect that loan applications for borrowers should also become less cumbersome.
“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.
“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.”
Ms Wawn said the flexibility should also help to 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,” Ms Wawn flagged.
“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,” she said.
In conclusion, Ms Wawn noted that while the 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”.
“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,” she said.