Getting an approved home loan is now a lot harder than before, preventing buyers from breaking into the market, reveals a new CoreLogic survey.
About 45% of Australian borrowers said that it had become more difficult to get the approval signal from lenders, up from 39% in 2017. This could be explained by the As a result, lenders take a closer look at each borrower's expenses, said CoreLogic's research director. Tim Lawless.
"The severe tightening of credit availability following the tightening of prudential regulation and the results of the royal commission is hurting Australians, who are struggling to get a loan," he said.
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This echoes the sentiments expressed by various property experts who attended the Financial Review's Australian Financial Property Summit in Sydney last week.
"Personally, I just installed myself, and it was a very painful process.This is a torture.People tell us that we are being asked to "How many cafes they drink?" It can become foolish just how much scrutiny there is, "said Mirvac Chief Executive Susan Lloyd-Hurwitz.
Even Treasurer Josh Frydenberg warned regulators not to be "too sheepish" in enforcing loan restrictions, claiming that it would only have a negative impact on behavior consumers.
"It is in everyone's interest that the aspirations of working families do not constitute collateral damage in this regulatory process," he said.
The CoreLogic survey also found that affordability ratios remain high: a typical Australian household spends 6.5 times its gross annual income to buy a house at a median price of $ 524,000. In addition, they spend 35% of their income to deal with mortgage repayments.
Weak wage growth was also cited in the survey as a significant drag. Limited revenue growth has pushed many Australians to scramble for a mortgage loan.
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