ANZ boss Shayne Elliott warns home loans are ‘only for the rich’
The head of banking giant ANZ has issued a stark warning to first home buyers as the great Aussie dream continues to slip out of reach.
A bank boss has claimed home loans have become “the preserve of the rich” as lending regulations price everyday Australians out of the property market.
ANZ chief executive Shayne Elliott made the startling claim to The Australian, noting it was the most difficult environment for first home buyers in 30 years.
“If you want a loan you have to be better off, and essentially rich,” he said.
“There’s big social consequences and political consequences.
“Is that a society we want where people can’t get a home loan or get a loan to start a business?”
Mr Elliott said strict lending regulations — including assessing loan applicants based on a 3 per cent increase to interest rates — risked containing lending to wealthy borrowers.
“No one is suggesting we want to be irresponsible,” he said.
“There’s very strong evidence to support the argument we’ve put forward that a lot of people are missing out on getting a home loan, to run a business or get a credit card, not because they’re bad people, but because regulation doesn’t allow banks to lean in and support those people.
“That has implications for people’s aspirations for being a part of the community and wanting to invest.”
The comments came after ANZ unveiled a profit of more than $7 billion for 2023.
The banking giant’s cash profit also rose in 2023 by 14 per cent to $7.4bn compared to the previous year.
Despite the strong result, Mr Elliott said the “external environment” was likely to remain challenging.
“The full impact of higher interest rates is expected to continue to impact economic activity,” he said.
“Our customers have so far proven resilient, with a relatively low level of delinquencies despite the current interest rate tightening cycle.
“We will continue to focus on supporting customers through what will likely be another year of cost-of-living pressures.”
Mr Elliot said he expected the economy to be supported by strong household savings, the housing market, migration, and low unemployment.
RBA delivers 13th interest rate hike
Last week the RBA delivered its 13th interest rate hike to 4.35 per cent in a bid to tame inflation.
The rise adds $15 to repayments for every $100,000 borrowed for those with a variable home loan.
RBA governor Michele Bullock said: “Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago. The latest reading on CPI inflation indicates that while goods price inflation has eased further, the prices of many services are continuing to rise briskly.”
Huge salary Aussies need to afford home
The bleak economic forecast comes as Finder research revealed Aussie home buyers are needing nearly double the average full time salary to be able to afford a home, with the pain only increasing after the national reserve bank hiked the cash rate again.
Finder found the minimum household income required to afford a mortgage for the average Australian house is $182,000, while those owning units need about $130,000.
The average full time salary is roughly $96,000, according to ABS data, leaving homeowners digging deep into their pockets to be able to afford their mortgage.
Finder’s head of consumer research, Graham Cooke, said the prospect of owning a home is dwindling for new buyers trying to get into the market.
“People are looking at stretching themselves financially in order to purchase a property,” he said.
“While not impossible, there are a lot of things to consider for those aspiring to own a home.”
– with Michelle Bowes, Aisling Brennan, NCA NewsWire
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