ANZ CEO Shayne Elliott said home loans are now the “preserve of the rich” as everyday Australians are increasingly being priced out of the housing market.
Mr. Elliot said Australians looking to buy a home face the most challenging conditions in three decades.
“If you want a loan, you have to be better off and essentially rich,” he said.
He said high inflation and strict lending regulations, such as assessing loan applicants based on a 3 percent increase in interest rates, prevent many from entering the market.
People are “missing out on getting a home loan, running a business or getting a credit card, not because they’re bad people, but because regulation doesn’t allow banks to lean in and support those people,” he said.
He said regulations also came at a cost.
“It means that fewer people get into harm’s way, but it also means that fewer people get the opportunity of owning a home who might have otherwise got that opportunity,” he said.
“That has implications for people’s aspirations for being a part of the community and wanting to invest.”
“Is that a society we want?” he asked.
‘Extremely High’ Migration Influx Caused Inflation
Some experts argue the recent influx of migrants worsened the unaffordability problem.Former Treasurer Peter Costello said that this year’s surge in arrivals (500,000 to 600,000) was an “enormous adjustment for the economy” as the many thousands of immigrants put considerable pressure on housing demand.
“No wonder we’ve got rental shortages,” he told the UBS Australasia Conference on Nov. 14.
Independent MP Dai Le agreed that “huge migration is really putting pressure on the demand for housing, and that is driving up inflation as well.”
For example, in June, OPEC Plus, a group of petroleum exporting countries and allies led by Russia that produces around 40 percent of the world’s crude oil, announced that it would limit its production output in 2024.
That would be on top of existing output cuts have led to a drop of 3.66 million oil barrels per day or 3.6 percent of global demand.
As demand remained resilient, Commonwealth Bank energy expert Vivek Dhar noted that global stockpiles would dwindle, increasing oil prices.
Rising inflation makes managing everyday expenses challenging for households and families.
Mortage Holders Fork Out an Extra $1,345 Monthly
It comes after the Reserve Bank of Australia (RBA) delivered its 13th interest rate raise to 4.35 percent to tame inflation.Graham Cooke, the head of consumer research at Finder’s financial comparison website, said the interest rate increase dealt another blow to mortgage holders.
“Mortgage holders are already on the ropes; the last thing they wanted was another slug from the RBA,” he said.
“Aussies with a $590,000 (US$380,000) mortgage will now be forking out roughly $1,345 more per month than they were in April last year,” he said.
Prime Minister Says Cost-of-Living Number 1 Priority
With Australia feeling the pressure, Prime Minister Anthony Albanese says cost-of-living will now be his government’s top priority.“Our government understands the cost of living is the number one pressure on Australian families,” the prime minister said.
However, several opposition MPs have been critical of the prime minister’s position.
“Australians are being smashed by interest rate rises, rent rises, electricity rises, grocery price rises, fuel price rises, only to see a prime minister who is effectively throwing up his hands and saying, ‘There‘s nothing more we can do to help you,'” Ms. Ley said.
“People are reaching out for help that have never asked for it before because this government doesn’t have a plan to tackle inflation.”
