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Reducing the dominance of the big banks could increase the supply of housing, according to Australia’s peak building group.
Master Builders Australia told the federal government’s Financial System Inquiry that a lack of competition was making it harder for builders to access credit.
The association said builders continue to suffer from the tougher lending criteria introduced during the GFC.
“Difficulties with cash flow and accessing credit from banks and other lending institutions remain as key issues today as tough lending criteria continue to be imposed on builders and developers,” the submission said.
“Master Builders Australia recommends that the inquiry examine whether there are initiatives that might remove impediments to competition and encourage greater participation in the market by lenders outside the four major banks… provided any measures adopted are market-based with limited extra regulation.”
The association also called for greater transparency in the banks’ risk assessment procedures.
“Queensland Master Builders Association reports that the impact of mortgage valuations on new housing activity is a major issue affecting a number of businesses in that state,” it said.
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