Banking Royal Commission – don’t break the economy in fixing the Banks
08 February 2019
The final report of the Hayne
Royal Commission into misconduct in the banking and financial services
industries comes at a critical time for the Australian
property
industry.
“A strong, stable and well-functioning financial system is the lifeblood
of our industry and the Australian economy,” said Ken Morrison, Chief
Executive of the
Property Council of Australia.
“In fixing the issues highlighted by the Royal Commission, we must avoid
creating new problems in other leading areas of the economy, especially
around the efficient and responsible provision of credit for qualified
borrowers.
“How Government, regulators and financial institutions themselves
respond to the Hayne recommendations will have direct consequences for
first home buyers, up-sizers and down-sizers, property investors and the
1.4 million Australians who work in the property industry,” Mr Morrison
said.
The residential property market is worth almost $7 trillion which is 3.5
times the size of the Australian stock market. Mr Morrison said there
was already plenty of evidence of the significant impact the tightening
of credit was having on buyer demand and property values. This is
particularly noticeable in the market for new homes and apartments.
The latest ABS data on housing finance showed a 2.5 per cent decline in
the value of dwelling commitments in the year to November 2018,
including a 4.5 per cent drop in the value of commitments for investment
property.
The ANZ/Property Council industry confidence survey for
the March 2019 quarter reported that expectations around the
availability of debt finance over the next 12 months has fallen to its
lowest level since the survey’s inception since its inception in 2011.
The survey tracks the sentiment of more than 1,000 people from across
the Australian property industry.
At this stage of the property cycle, and particularly set against the
large drop in residential property values in our biggest cities,
Australians will be looking for
policy responses that deliver certainty
and drive confidence for buying and investing in property which, for
most Australians, is their biggest financial asset.
“Access to credit matters for people looking to buy new or established
properties, including first home buyers,” Mr Morrison said.
“The property industry also underpins state and territory government
budgets, accounting for more than half of their total revenues.
“A strong property industry delivers great places for Australians to
live and work, provides jobs and drives economic growth, and helps
Australians save for their future.
“The Government’s response to the Hayne royal commission must fix the
problems of financial services without damaging the rest of the
economy,” Mr Morrison said.
--ENDS--
Source: Property Council - www.propertycouncil.com.au
Contact: Media contact: Matt Francis | M 0467 777 220
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