The chief of one of ‘s biggest banks has declared home ownership is now the ‘preserve of the rich’ courtesy of low housing supply and soaring interest rates.
ANZ boss Shayne Elliot said it is now the most difficult environment to get approved for a home loan in three decades due to high mortgage repayments and tougher lending regulations.
His comments follow ex-federal Treasurer and outgoing Future Fund chairman Peter Costello warning ‘s record high migration was weighing on the rental market and making the Reserve Bank’s battle to reduce inflation tougher.
‘If you want a loan you have to be better off, and essentially rich,’ Mr Elliott told The n.
‘There’s big social and political consequences… Is that a society we want, where people can’t get a home loan or get a loan to start a business?’
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ANZ boss Shayne Elliot said the owning a home in was now the domain of the rich
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First homebuyers are being priced out of the market as high mortgage repayments make it harder to get a loan
The average n mortgage has soared in the last decade from about $350,000 in 2013 to $598,867 this year, according to Bureau of Statistics data.
This rise didn’t prevent first homebuyers entering the market while interest rates were at less than 1 per cent, but following 13 interest rate hikes in 18 months, monthly repayments are now astronomical.
According to Canstar data in April 2022 the average mortgage bill was $2570 but that as now risen to $4151 with interest rates now at 4.35 per cent.
Mr Costello said the housing market troubles weren’t confined to those wanting to purchase a home, with renters also feeling the squeeze.
He pointed to ‘s record levels of migration – more than 500,000 people in the 12 months to September – as putting pressure on the already stressed rental market.
‘ has always been a migrant country and I’ve always supported immigration. But the levels of immigration now are extremely high,’ Mr Costello told a conference in Sydney this week.
He said it was ‘no wonder’ there were rental shortages.
Acting RBA assistant governor (economic) Marion Kohler said inflation was proving difficult to tame.
She said the recent spike in oil prices had served as a ‘timely reminder’ that supply shocks could add to the challenge of bringing inflation back to target.
Also speaking at the UBS Australasia Conference in Sydney, Dr Kohler said the broader economy was evolving ‘more or less as we expected a year ago’.
Economic growth was slowing, the labour market was easing, and headline inflation was coming down, led by moderating goods prices as supply chain issues resolved.
But she added: ‘Inflation is still too high and underlying inflation is higher than expected a year ago.’
‘Prices of many services have been rising briskly in ,’ she said, noting that services price inflation has been slow to decline in many other economies.
![Petrol prices are soaring putting added pressure on households and making it harder for the RBA to battle inflation](https://i.dailymail.co.uk/1s/2023/11/14/02/77767873-12745753-image-m-52_1699930319982.jpg)
Petrol prices are soaring putting added pressure on households and making it harder for the RBA to battle inflation
![Higher grocery prices and skyrocketing electricity bills are also adding to soaring mortgage repayments](https://i.dailymail.co.uk/1s/2023/11/14/02/77767875-12745753-image-a-50_1699930312028.jpg)
Higher grocery prices and skyrocketing electricity bills are also adding to soaring mortgage repayments
Treasurer Jim Chalmers said inflation remained his primary concern, but was ‘not our only challenge’.
‘Central banks and budgets are focused on demand management, but it’s on the supply side where we can lift the speed limits of our economies in the medium term,’ he said in opening remarks to the meeting of APEC economic ministers in the United States this week.
He said it was important to reorient economies to account for major trends, such as the low carbon transition and aging populations.
Payment data from Commonwealth Bank revealed a sharp slowdown in spending in October after a spate of major events, such as the FIFA Women’s World Cup, kept spending elevated over the three months prior.
The one per cent fall throughout October followed three months of monthly improvements, with the annual pace of growth also falling back.
Recreation as charted by the CommBank Household Spending Insights index – which captures roughly 30 per cent of consumer transactions – sunk 4.7 per cent over the month, with hospitality also recording a sharp 4.5 per cent decline.
‘People may have exhausted their desire to go to these big events and until the next big event happens, things look a bit soft,’ CBA chief economist Stephen Halmarick said.
He said higher interest rates were clearly weighing on households, as well as ballooning prices for essentials, such as utilities, transport, education, health and insurance.
Discretionary spending fell 3.7 per cent, whereas essentials lifted 0.3 per cent.
‘The spending that’s increased is really about higher prices, and people having to spend more money on things that they may not necessarily enjoy spending more money on,’ Mr Halmarick said.