Harry Triguboff says new bank lending rules are too tough

Harry Triguboff says new bank lending rules are too tough
Harry Triguboff says new bank lending rules are too tough

Australia's second richest person, Harry Triguboff, has suggested Australia's bank had become "shell shocked."

But "there is nothing wrong with our banks, I promise you," Mr Triguboff told The Australian Financial Review.

"I assure you they make mistakes, so do we all. But there is nothing wrong with them. They are shell shocked and if affects all of us."

He attacked their new stronger borrowing tests saying using expenses to help justify if and how much a person could afford to borrow was "the dumbest thing to do in the world".

Triguboff argues just because someone spends a set amount each month doesn't mean this will continue when they have a mortgage as borrowers will divert spending to repay their mortgage.

"All this is very dumb when you have a falling market...it's playing dumb."

Triguboff says tighter lending was adding to the softening market, which was also being hurt by fewer Chinese buyers entering the market.

Meriton national sales director James Sialepis said there were instances of borrowers going to the same bank and branch but instead of being able to get a $1 million loan three months ago, it was now $750,000 to $800,000.

"Obviously the royal commission has had a huge impact on people being assessed."

Mr Sialepis said the banks "used to assess people on a fixed number of monthly expenses".

"Now, every single receipt needs to be looked at and the point Harry (Triguboff) makes is great.

"If I haven't bought a house and I have a disposable income and I have extra money in the pocket I'll go and spend that but once I get into a mortgage, that's it I made the sacrifices," he said.

"There's no more going out, there's no more footy memberships, I need to start concentrating on paying that mortgage off and at the moment I think the banks are looking in the rear view mirror too much."

 
Tags: 
Harry Triguboff Royal Commission

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