One brokerage is calling on lenders to loosen the lending criteria for home loans.
Loan Market Group’s chief operating officer Dean Rushton said the threat of rising interest rates had stifled homebuyer interest, and those that were interested were finding it hard to obtain finance approval.
“We believe banks will move their interest rates up independently of the RBA – but better they do this than pull back from lending altogether,” Mr Rushton said.
“The saving grace for the home finance sector in that eventuality would be if banks were to relax their lending criteria.”
A number of the majors have pulled back on their lending in 2010 due to higher funding costs.
However, Mr Rushton said hopefully future rate hikes and movements outside the RBA will restore some of their appetite to lend, particularly to the first home buyer sector.
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