The government’s “first-home buyer” motivation only caused a sharp increase in the house property prices, said ANZ Bank’s Australian Chief Executive Phil Chronican.

Furthermore, Chronican warned that mortgage debts would remain high as consumers thrive with cost of living pressures.

The chief executive urged the governments and regulators to address the lingering demand and supply disparity in domestic property as local housing prices are to stay even.

Having blamed the government for not releasing enough land to develop, ANZ estimated a 230,000 shortfall in the supply of residential houses in Australia.

The government's increased “first-home buyer” stimulus did little to ease affordability issues, he said.

"We need to refrain from pursuing short-term policies that add to demand-side pressures. If we really want to help people into homes, we need to address the supply-side issues, not add to the demand that drives prices up,” Chronican added.

"We have seen what can happen when (governments) get it wrong in the case of the first-home owner's grant. These grants were capitalised against house prices so quickly they didn't so much benefit first-home buyers . . . it was the first-home seller's grant really," Chronican expressed in a concerned tone.

Analysts have forecast that arrears’ rate could soar to nearly $13 billion in the following year as mortgages written in 2009 begin to sour.

Amount overdues were "a problem that's going to stay with us for a while", Chronican said. "I don't know if it will get worse or not," he added.
In conclusion, Chronican said the primary purpose of a house is as a place to live, not a speculative investment vehicle as he urged authorities to address the industrial issues right away amidst the arrears crisis.