House price falls haven't made homes more affordable, inquiry told, as banks grilled on profits

Résumé détaillé

Housing affordability has worsened despite lower prices, with supply shortages likely to continue and prices forecast to fall until 2028.

The government's housing policy changes and interest rate rises have not led to more affordable homes or an increase in housing supply, but prices are tipped to continue falling until 2028, a parliamentary inquiry into Australia's four biggest banks heard on Thursday.

Westpac is lending to 30 per cent fewer housing construction projects than it did up to a year and a half ago, its chief told a parliamentary inquiry on Thursday.

The bank was careful not to pin the tailspin on the government's abolition of negative gearing and the capital gains tax discount in the federal budget in May, chalking it up mainly to cost pressures.

Labor's reforms included a carve-out letting investors negatively gear new builds — meant to incentivise construction investment — but Westpac chief executive Anthony Miller said Westpac was yet to see that take shape.

"There is some improvement in that area, but it has not come through as fast or as significant as perhaps we would like," Miller said.

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He said governments still needed to work harder to spur new building investment, boost supply and improve housing affordability.

"Providing more resource for the demand side isn't going to solve the problem," he said.

The day before Thursday's hearings, it was revealed investor home loans had cratered by a record 30.6 per cent in the year to September.

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