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{{propApi.successMessage}} {{region}} Change locationHIA Backs Mortgage Lending Inquiry Recommendations
HIA Backs Mortgage Lending Inquiry Recommendations
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In its report on the inquiry into the financial regulatory framework home ownership, the Senate Economics Committee has recommended that the nation's banking regulator, the Australian Prudential Regulation Authority (APRA), be issued a revised mandate to specifically consider the plight of first home buyers in its pursuit of financial stability.
“HIA particularly applauds the Committee’s recommendation to establish a statutory duty for the Parliamentary Joint Committee on Corporations and Financial Services to undertake regular scrutiny and oversight,” added Mr King
“This recommendation is a strong step towards the oversight that HIA advocated for throughout the inquiry consultation process.
“This must be complimented by policy makers operating proactively in holding APRA to account in view of the marked decline in home ownership over two decades.
“In APRA’s quest for an unquestionably strong banking and financial sector, first home buyers and other would-be home buyers have been forgotten and have been increasingly pushed out of the home ownership through excessive regulation.
“A decade of restrictions, followed by an announcement this week, to retain the status quo on lending standards reveals a misreading of the capacity of Australian borrowers to service their debts, even in the midst of a cost-of-living crisis.
“In its most recent Financial Stability Review, the Reserve Bank stated 0.8 per cent of all first home buyers are 90+ days in mortgage arrears. This is extraordinarily low.
“Last week the Reserve Bank Assistant Governor (Financial Markets) stated, ‘Despite the substantial increase in mortgage payments, there has been little increase in acute financial distress among borrowers.’
“Despite prolonged significant budgetary challenges, the vast majority of first home buyers are keeping their mortgage repayments on track.
“Yet, there are many more potential first home buyers currently in the rental market who deserve the chance to secure a home loan and purchase their first home.
“Sadly, home ownership rates have declined significantly over the last two decades with the percentage of Australian households that own their own home with or without a mortgage decreasing from 71 per cent to 66 per cent .
In its submission to the Senate inquiry, HIA identified that a decade of additional costs has restricted competition among banks and made it increasingly expensive for them to lend to first home buyers.
“Over two decades, successive governments have failed to adequately hold ARPA to account for the layers of restriction that has been placed on lending institutions in Australia over the last decade, which has resulted in an insufficient credit availability for first home buyers.
“There has been little to no cost-benefit analysis of the market impact of a decade of APRA’s tightening of capital and liquidity requirements on Australian banks.
“The broader framework of lending standards warrants a cost-benefit analysis and recalibration to a more viable rate of mortgage arrears, such as the 2 to 3 per cent inflation target for the RBA.
“Ensuring that home ownership remains an attainable aspiration for Australian households is an equally important objective to financial system strength, and a revised APRA mandate should reflect this,” concluded Mr King.
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Update: contracts signed before 1 July 2026 and optional cover
HIA will continue to update you as we receive further advice and information on the ongoing transition from Domestic Building Insurance (DBI) to the First Resort Home Warranty Scheme (FRHWS).
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