Westpac boss Brian Hartzer rejects blame for worsening housing price slump

Westpac boss Brian Hartzer rejects blame for worsening housing price slump
Westpac boss Brian Hartzer rejects blame for worsening housing price slump

Westpac chief executive Brian Hartzer has rejected claims that the big four banks are worsening the housing price slump by cutting off credit.

"Let's be clear: we want to lend", Hartzer said in his opinion column in the Australian Financial Review.

"For Westpac, the recent decline in credit growth was due entirely to a reduction in new applications; average approved loans sizes actually increased slightly, while our approval rates remained unchanged".

"As to the perception that the royal commission has made banks scared to lend, for Westpac this is simply not the case", Hartzer said.

Hartzer did suggest the increase in scrutiny of customers' expenses and income, plus the building of additional buggers into loan serviceability calculations, had added to the time and cost of getting a loan.

"My view is that the housing market remains fundamentally sound and, overall, the adjustments are nothing to be alarmed about."

Median house prices in Sydney fell 10 percent in 2018, according to CoreLogic, while the second biggest capital housing market Melbourne saw 9.1 percent falls, accelerated in the latter part of the year.

Hartzer said the falls needed to be seen in the context of a 75 percent jump in Sydney prices between 2011 and 2017, and a 55 percent rise in Melbourne prices over the same period.

He cautions that investors have been given further "reason to pause", ahead of the looming general election and Labor's proposed tightening of tax breaks for negatively geared property.

He said "uncertainty around potential taxation changes relating to residential property" was weighing on demand from property investors while buyers were putting off decisions to buy, upgrade or invest until after the election. 

Tags: 
Westpac Mortgage Lending

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