It’s been reported lately that the tight lending practices of lending institutions are leading the way for property prices to hit the roof in Australia. Ben Wilmot from the Australia Financial Review went to the ground level to find out actual statistics from the horses’ mouth.

Nearly 45 per cent of residential builders’ clients have cancelled or postponed projects in Victoria this year because they could not secure finance, an industry survey says.
Master Builders Association of Victoria executive director Brian Welch said the survey by his showed the damage that tight lending practices were continuing to have on housing affordability.

“Victoria has an undersupply of 29,000 homes and we’re currently building 5000 too few homes per year to meet that demand,” Mr. Welch
Said.
“If Victorian families are unable to secure finance to build their first home, then this under-supply will worsen.”

When builders were asked if their ability to access credit over the past three months has changed, 5 percent reported an improvement but 24 per cent reported a deterioration.

“Our members are telling us that many residential projects are not getting off the ground because banks were unwilling to lend.”

About one-third of builders reported a rise in customer inquiries in the past quarter, but many were not developing due to problems in projects getting credit.

If the situation continues, it won’t be long before we see median prices of homes in various states hitting a million bucks.