Westpac chief executive Brian Hartzer has rejected claims that the Big Four banks are worsening the housing price slump in Sydney and Melbourne by cutting off credit.
“Let’s be clear: we want to lend,” Hartzer says in his opinion column in the Australian Financial Review.
“For Westpac, the recent decline in credit growth was due entirely to a reduction in new applications. Average approved loans sizes actually increased slightly, while our approval rates remained unchanged.
“As to the perception that the Royal Commission has made banks scared to lend, for Westpac this is simply not the case.”
Hartzer does suggest, however, that the increase in scrutiny of customers’ expenses and income, has added to the time and cost of getting a loan.
“My view is that the housing market remains fundamentally sound and, overall, the adjustments are nothing to be alarmed about,” he says.
Hartzer says the price falls in Sydney and Melbourne need to be seen in the context of a 75% jump in Sydney prices between 2011 and 2017, and a 55% rise in Melbourne.