fbpx

Relaxed lending laws will boost real estate prices

Real estate markets are expected to get another boost if the Australian Government’s plan to ease responsible lending laws goes ahead next month.

The plans were first announced in September of last year by Treasurer Josh Frydenberg. The relaxation of these laws is a means to encourage further lending and investment, and subsequently economic recovery.

Easing these responsible lending laws would make it easier to obtain a home loan, with estimates showing that the average customer could borrow an extra $70,000.

CoreLogic’s Head of Research, Eliza Owen, said that “the rate in which credit flows into housing purchases could have added housing demand and put upward pressure on prices.”

When the Treasurer made the announcement, house prices were at a stand still and Australia was in the middle of its deepest economic contraction since the 1930s.

The situation is now drastically different, with house prices seeing significant upward movement. So the question remains: does the Treasurer still believe that relaxing these laws is necessary, or will the Government reconsider their stance? ∎

Further reading

Insights

Economic Trends of 2020

The economic trends of 2020 reflect the year itself: massively disrupted and impossible to predict. But what can we learn from last year?

Make an
Informed Decision

View our property development info pack to kickstart your property development journey. All the information you need about Lion, our models, and our expert team, in one convenient place, so you can make an educated decision.