Chair's foreword
1.1Home ownership is rightly called the Australian dream. It is one of the bedrock values of our nation’s social and economic fabric. Home ownership drives strong economic and social security.
1.2This inquiry was established by the Senate to look into the laws and regulations surrounding lending. Its focus was not on supply or other housing issues.
1.3Its focus was narrow, and purposefully so: to investigate the regulatory and legal framework which may be negatively affecting first homeownership in Australia.
1.4The following report is an analysis of the laws, prudential standards, and macroprudential policies in the current Australian system and how this has impacted prospective first home buyers.
1.5The evidence through the inquiry was clear about the negative impact being felt by first homebuyers from existing prudential standards. APRA’s three per cent mortgage serviceability buffer and current mortgage credit risk weightings were shown to be particularly harmful to this group.
1.6It is clear from the evidence received that the lending pendulum has swung away from first homeowners as a group, and this cohort is increasingly being either locked out of the housing market or only able to access it through the so-called ‘Bank of Mum and Dad.’
1.7By one measure, the Bank of Mum and Dad has become the fifth largest lender in Australia. This is particularly concerning as parental wealth should not determine housing outcomes.
1.8The process of this inquiry has shown that not enough focus has been placed on lending in the current policy framework. The Albanese Government has vacated this space in order to pursue its corporate and bureaucratic housing agenda, leaving first homeowners as a cohort behind.
1.9A table in this report, Table 3.2 produced on page 29, shows there has been no effort on the part of the Australian government to calibrate lending to benefit first homebuyers, a highly concerning state of affairs.
1.10The Australian dream should be achievable for all Australians, not just those who are lucky enough to have parental support, or those who were fortunate enough to get a foot on the property ladder before a certain date.
1.11This report shows there is a clear need to get the dream back on track, especially for Millennials and Gen Z. This must be a priority of our Parliament.
1.12This report sets out an agenda to get lending policy working for first homeowners. The recommendations within it are the most practical ways to tilt the scales back in favour of first homeowners.
1.13If we get this right, implementing the recommendations of this report and lifting housing supply could see another 50000 people being able to enter the housing market, with all the associated economic and social benefits this could bring.