Lending laws changes need property professional

Photo Glenn Hunt
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THE Australian Property Institute has welcomed the federal budget and said whilst better access to credit will be a boost for the industry, due diligence from property professionals will be important to ensure Australians borrow within their means.

API CEO Amelia Hodge welcomed the focus on the economic recovery.

“Across the property industry we’re still feeling the effects of coronavirus on business activity and the budget’s focus on economic recovery is welcomed.

“Investment by the federal government in extending the First Home Loan Deposit Scheme and the introduction of JobMaker and JobTrainer will keep businesses open and people employed right across the economy and that’s a good thing for the 1.4 million Australians who work and rely on the property industry,” she added.

Hodge said consumer confidence, building activity and support for job security will help property transactions continue.

“At a time when Australians are facing so many uncertainties, the objective advice of property professionals will be needed as families and small businesses consider their financial position. This might include refinancing or selling the family home, farm or a small business shopfront.

“While better access by Australians to credit would be a welcome boost to property and construction, the due diligence provided by property professionals will be so important for Australians to make sure we are lending within our means and with a true perspective of property values – this needs to be considered as the government review’s responsible lending laws,” Hodge added.

The government is rolling back the responsible lending obligations for banks to help more homebuyers get into the market. Treasurer Josh Frydenberg said what started a decade ago as a principles based framework to regulate the provision of consumer credit has now evolved into a regime that is overly prescriptive, complex and unnecessarily onerous on consumers.

The changes allow lenders to rely on the information provided by borrowers, replacing the current practice of ‘lender beware’ with a ‘borrower responsibility’ principle.

The API has also backed permanent reforms for e-transactions, including property transactions, alongside a coalition which includes the Australian Banking Association and the Real Estate Institute of Australia to increase efficiency in the industry.

The federal budget has been welcomed by the property industry, but some industry groups said it was a “lost opportunity”.

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