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“Australia has an unquestionably strong financial sector. It has withstood significant shocks, such as the Global Financial Crisis and the COVID recession, without the emergence of financial contagion.
“The share of loans that are impaired is exceptionally low, at around 0.4 per cent of all loans issued. This is significantly lower than in other developed economies.
“The very low levels of mortgage delinquency in Australia reflect the restrictive lending regulations imposed by financial regulators in Australia. Since 2010, financial regulations have made it increasingly conservative making it progressively more difficult for first home buyers to enter the market.
“Despite the lows levels of mortgage delinquency, APRA announced this morning that it has increased the ‘serviceability buffer’ for a new mortgage from 2.5 per cent to 3 per cent.
“First home buyers accounted for 35 per cent of owner occupier loans issued in August 2021 and these measures will make it harder to access a loan.
“This additional constraint is being imposed despite the share of loans with a 10 per cent deposit or less declining since December 2020. This share is well below those observed over the past decade.
“First home buyers are the group who are typically constrained by serviceability thresholds. It is this group that will be hit the hardest by these changes.
“Restricting access to credit for new households seeking to enter the housing market will put further downward pressure on the rate of home ownership in Australia,” concluded Mr Reardon.
“Australia is set to commence construction on little more than a million new homes over the next five years, almost 200,000 short of the Australian government’s target,” stated HIA Senior Economist Tom Devitt.
HIA provided a submission into the Help to Buy Bill 2023 and the Help to Buy (Consequential Provisions) Bill 2023, herein referred to as the Help to Buy Bills.
“The upcoming Northern Territory budget presents a key opportunity for the Government to focus attention on measures to support increased housing supply and the delivery of much-needed homes in the Territory,” HIA Executive Director, Luis Espinoza said today.
New fast-tracked process to access land titles earlier for eligible developments.