Inquiry is set to run until December and will seek submissions from the public
The Senate has decided to initiate a new inquiry aimed at exploring how financial regulation can support homeownership, with a particular focus on reducing lending costs and improving accessibility for first home buyers.
The inquiry, which will be conducted by the Senate Economics References Committee, was proposed by the Coalition and will be chaired by Coalition assistant housing spokesperson Senator Andrew Bragg (pictured above).
The inquiry is set to run until December and will seek submissions from the public, aiming to gather insights from Australians, market participants, and the Australian Prudential Regulation Authority (APRA).
The inquiry is part of the Coalition’s broader strategy to examine how the easing of banking sector regulations might lower barriers for prospective first home buyers seeking mortgages.
According to Bragg, the goal is to create more opportunities for first-time buyers by investigating current lending practices and considering changes that could enhance competition and reduce costs.
“The nation can do more to support the aspiration of first home buyers,” Bragg said in a statement. “Australians must be able to have access to a mortgage as a prerequisite for a first home. We will generate more options to tilt the scales in favour of first home buyers.”
Bragg contrasted the Coalition’s approach with that of the Labor government, stating that the inquiry would focus on getting institutions to better serve individual aspirations, in opposition to what he described as 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 said.
The inquiry is expected to gather substantial evidence that could shape future policy proposals from both the Coalition and the Greens as they prepare for upcoming elections.
Industry support for home lending inquiry
Meanwhile, the Housing Industry Association (HIA) has expressed support for the newly announced Senate inquiry into financial regulations and their impact on homeownership in Australia.
“The Housing Industry Association welcomes the announcement of a Senate inquiry to examine how Australia’s financial regulations are impeding young Australians from getting into homeownership and to explore ways to reduce lending costs,” said 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.
“Therefore, we are looking for this Inquiry to identify those financial and regulatory impediments that are holding back young Australians and identify new measures to ensure that home ownership can remain an achievable goal for everyday Australians.”
Chris Christofi, the founder and CEO of Reventon, a financial services firm which offers solutions in accounting, financial planning, property investment and lending, said it was encouraging to see institutions such as APRA taking these issues seriously.
“Many people today are grappling with the pressures of rising living costs, and the recent increases in interest rates have made homeownership increasingly unattainable for a majority of the population,” Christofi said.
He said lenders imposing buffers – such as assessing a 6.14% interest rate at 9.14% – significantly impacted a client’s borrowing capacity.
“While these buffers made sense when rates were historically low, as it was clear they wouldn’t stay that way indefinitely, a 3% buffer now feels excessive, especially with economists predicting rate reductions in 2025.”
Christofi said it was already challenging with the rising costs of housing and everyday living, and the buffers were making it more difficult, not just for first home buyers but also for those looking to upgrade their homes.
“The focus often seems to be on first home buyers, but this issue is far more widespread. Families needing to upsize due to growth or those who owned property in the past but had to sell for various reasons face similar challenges.
“Perhaps a more holistic approach is needed, one that addresses the broader spectrum of homebuyers rather than focusing solely on first-time buyers.”
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