Bank lending squeeze heading for nasty property and construction downturn: Robert Gottliebsen

Fasten your safety belts for a nasty downturn.

That's the warning from The Australian columnist Robert Gottliebsen.

"My fear is that on top of the APRA squeeze, we will have royal commission recommendations and then a series of class action court cases against banks.

"Combined, they will deepen and extend the credit squeeze.

"If the vicious downward spiral was broken today there would be minimal damage.

"But the squeeze looks like not only continuing but getting worse.

"If that happens, fasten your safety belts for a nasty downturn," he wrote earlier this week in the national newspaper.

Robert Gottliebsen says the credit squeeze juggernaut is being driven by the regulators, led by APRA.

He says bank chief executives, bank boards with greatly reduced power and the local bank branch managers are scared by what they describe in low tones as the APRA “Gestapo”.

"There is no doubt that APRA is the main force behind the credit squeeze.

"Unless much clearer boundaries are drawn, APRA, aided by the royal commission, will drive house prices lower and lower and construction rates will fall."