Agents blame big banks for housing problems

Posted on 25/03/2010  

Real estate agents are fed up with the major banks, judging by comments by REIA president David Airey to Federal Housing Minister Tanya Plibersek. 

The Real Estate Institute of Australia chief met Plibersek today to talk about issues facing the real estate profession and was particularly vocal about the lack of competition in mortgage lending. 

Airey says the big four banks account for over 80% of the home lending market. “This has severely depleted competition and funding for smaller banks such as Bendigo Adelaide and Bank of Queensland, as well as other non bank lenders who suffer a huge disadvantage with funding costs,” he says. 

Airey says the major banks are “continually moving the goal posts” with long delays in loan approvals, tightening of credit, lowered Loan to Valuation Ratio’s (LVR’s) and changed credit assessment criteria. This often causes property sales to collapse. 

“Restricted and changing lending practices by the big banks works against the Government’s aim to increase housing supply,” he says.The REIA is also extremely concerned about access to finance for small business and will be making a submission to the Senate Inquiry on this specific issue. 

Plibersek has invited the REIA to forward information relating to access to finance for small business, and restricted lending practices in the mortgage market. 

The REIA, of course, is not alone in its frustration with the major lenders, who have handed home owners larger interest rate increases than those mandated by the Reserve Bank – and are hinting that more is to come. 

Fortunately, new competition is starting to come into the home lending market and some of the non-bank lenders are beginning to compete strongly on interest rates. This is detailed in the upcoming March edition of The Ryder Report to be published next week and available exclusively on the hotspotting.com.au website. 

ENDS

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