The Federal Government has given the rebuilding of the economy a big boost by removing overly restrictive lending requirements for finance lenders, including mortgage finance.
"We commend the Federal Government for winding back regulation to a more reasonable position that allows the market more flexibility to approve housing finance," said Master Builders Australia CEO Denita Wawn.
"We hope this means that banks will reconsider their loan to value ratios (LVRs) to help people overcome the deposit gap.
"We expect that loan applications for borrowers should also become less cumbersome.
"The Reserve Bank has already flagged that the tighter regulatory provisions have been holding back credit growth and some banks have acknowledged that they have been forced into being overly conservative.
"It is good to see the Federal Government is giving banks flexibility to deal with applications on a case by case basis which should result in lenders providing mortgage finance to more people.
"It should help streamline the processing of HomeBuilder applications on top of pre-approval processes which have been adopted in some states. All states and territories should adopt these pre-approval processes," Ms Wawn said.
Access to finance, land titling and planning approvals can substantially delay building of new homes and measures were needed to remove impediments and speed up processing of HomeBuilder applications.
"We expect that loan applications for borrowers should also become less cumbersome."Denita Wawn
"While today's announcement should open up access to mortgage finance, we now need state and territory governments to activate their option under the agreement with the Federal Government to extend the HomeBuilder construction deadline from three to six months, as has already occurred in Victoria."
This will ensure that the economic stimulus provided by HomeBuilder can be maximised.