The Property Council of Australia has welcomed the Government’s response to the final report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
“Restoring trust, better consumer outcomes, maintaining the flow of credit and promoting competition are rightfully at the centre of the Government’s response to Commissioner Hayne’s 76 recommendations in his landmark final report,” said Ken Morrison, Chief Executive of the Property Council.
“A strong, stable and well-functioning financial system is the lifeblood of the economy, so it is important not to break the economy as policy makers set about fixing the banks. On first blush, the Government’s response seems to strike the right balance.”
Mr Morrison noted the significant changes proposed for the mortgage broking industry which could have important consequences for the residential property industry.
“Mortgage brokers account for more than half of all home loans settled, and are a vitally important source of advice and access to competitive finance for Australian property buyers,” Mr Morrison said.
“The abolition of trail commissions and the proposed shift in future to a ‘borrower pays’ model for broker commissions will need to be very carefully managed so that the objective of better outcomes for consumers is achieved without making it harder for qualified borrowers to find and secure competitive finance for property purchases.
“The proposed alignment of the regulatory framework for mortgage brokers with that of financial advisers may also impact on the future structure of the industry and access to finance.
“The property industry will need to be consulted on the transitional arrangements, particularly given the current uncertain state of the residential property cycle,” Mr Morrison said.
"We welcome the Treasurer's acknowledgement of the importance of these changes and the proposed staged approach over the longer term."
The Property Council has also welcomed the Federal Opposition's in principle acceptance of the recommendations and its commitment to consult with industry stakeholders on their implementation.