The Urban Development Institute of Australia (UDIA WA) has welcomed news today that the Australian Prudential Regulation Authority (APRA) is considering loosening mortgage rules – saying this will help boost the state’s struggling property market and assist more people into home ownership.
“Since 2014 APRA’s requirement for a 7% servicing benchmark rate has been in place and we have now got to a point where that is no longer appropriate,” UDIA WA CEO Tanya Steinbeck said.
“The current rules are severely impacting on people’s ability to get a loan and this has meant, for WA in particular, the market is struggling to recover,” Ms Steinbeck said.
“The need to reduce the benchmark has been recognised not only by those of us in the industry, the state government also pinpointed the issue when they released the recent budget and the Treasurer wrote to APRA asking them to reconsider the benchmark,” Ms Steinbeck said.
“With record low interest rates and falling house prices, we need to stimulate the market and make it less restrictive for potential buyers to get a loan,” Ms Steinbeck said.
“Of course, we still need to ensure there are stringent rules and credit checks in place, which there are, to ensure that people can realistically service their loan over time,” Ms Steinbeck said.
“However, people need to be supported and if they have saved their deposit and have the financial stability, they should be able to secure a reasonable home loan,” Ms Steinbeck said.
“This is particularly important as our rental market is tightening considerably, with vacancy rates down to just 2.5%,” Ms Steinbeck said.
“This is because more people are stuck in the rental cycle, unable to access a loan and step into home ownership.”
“In conjunction with the stability that the latest federal election outcome provides, we are hopeful that this move will really help to boost the market here in WA and that will have a positive flow on effect to the rest of the economy,” Ms Steinbeck said.
Ends.
For more information:
Gemma Osiejak
Executive Manager Communications and Marketing
UDIA WA
P: 0421 506 819
E: gosiejak@udiawa.com.au