Treasurer Jim Chalmers will reportedly announce today that HECS debts will become less of a barrier for people applying for home loans, under new regulations.
Banks are currently required to take student loan debt into account when assessing loan prospects, despite repayments only kicking in above a certain wage threshold, adjusted each year.
However, the Australian Financial Review has reported that Chalmers will announce banks can exclude HECS debts when conducting mortgage serviceability tests – if the lender expects the applicant to pay off the debt in “the near term”.
The Australian Prudential Regulation Authority will also knock HECS debts off their reported definition of debt to income, which can affect loan eligibility.
It’s the latest shot fired in an ongoing battle to seize the housing high ground between the government and the opposition.
Recent polling obtained exclusively by 9News showed 73 per cent of people said housing affordability was important to their vote.
The Coalition has put forward a proposed policy of allowing people to take money out of their super fund to buy a home, while the Labor government has passed a $10 billion Housing Australia Future Fund to finance more public housing.
The suburbs where house prices have doubled in less than four years
The property market continues to boom around the country despite slight softening in major markets such as Sydney.
Homeowners are also hanging on to the hope of an interest rate cut from the Reserve Bank of Australia next week.
Said cut would also likely be of benefit to the Albanese government, as a sign that inflation has sufficiently decreased to let the pressure off voters.
