Housing affordability: lending rules ‘locking out middle Australia’ from homes: ANZ CEO Shayne Elliott

Already a subscriber?ANZ chief executive Shayne Elliott says regulators are “locking out middle Australia” from being able to access home loans, in the latest warning from a major bank boss that there is a disproportionate focus on shrinking financial system risk.

The major banks have become increasingly strident in their criticism of the lending framework put in place following the global financial crisis, with the then chief executive of National Australia Bank,regulation had pushed customers “outside” the sector and into even riskier products. “We have a very safe system, and the cost is that some people are locked out. And I don’t see that getting better anytime soon, unless there is some form of intervention.”

“This most likely indicates that persistent inflation and the 4.25 percentage point hike in official interest rates since mid-2022 are affecting some borrowers,” the ratings agency’s analysts said.Rising unemployment is also a risk. NAB chief executive Andrew Irvine said this week that while the vast majority of borrowers had work, “if the employment statistics were to worsen, that would be really difficult for Australia”.

A family buying a median-priced house in Sydney, at $1.4 million, would need to earn $237,000. In Melbourne, for a $940,000 median house, the household salary would need to be $168,000, according to RateCity.

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