The Australian Government seems to want house prices to rise by 10% to help boost the economy, which ASX shares will benefit?
What Has Happened?
Treasurer Josh Frydenberg is going to give a speech to the Australian Financial Review’s Property Summit today.
According to AFR reporting, Mr Frydenberg will quote Treasury research showing that a 10% increase could to a 0.5% increase in GDP.
That’s he is putting pressure on ASIC so that the regulator isn’t too strict on the lending of banks like Commonwealth Bank of Australia (ASX: CBA)
, National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC).
We saw during the Royal Commission how stricter lending standards can have a negative effect on housing prices and a wider effect on the Australian economy.
It’s certainly true that we don’t want banks to be too strict, but it is prudent that they check out the borrowers because they’re lending hundreds of thousands of dollars which needs to be paid back over many years.
But moves by the RBA and APRA have put a bit of life back into the housing market and if Sydney and Melbourne house prices keep growing at over 1% a month then it might not take long to get 10% price growth.
If 10% house price growth does happen then banks like CBA could benefit, at least in the shorter term, from more credit lending.
Property portal businesses REA Group Limited (ASX: REA) and Domain Holdings Australia Ltd (ASX: DHG) could see a lot more activity if property owners see that the market has come back, they may have been holding off from listing earlier in the year.
Construction businesses like Brickworks Limited (ASX: BKW) could see a renewal of activity in the shorter term if it makes financial sense to build properties again.
We could also see ‘home’ businesses make a recovery so ones like JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Nick Scali Limited (ASX: NCK) could see more growth.
But whatever happens next, I’d want to make sure I want quality, reliable shares like the ones revealed for free in the report below.
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