Death knell sounds for easy credit

The era of cheap and easy credit approval is over, analysts have warned.

JP Morgan banking expert Brian Johnson made the claim following the news that the Commonwealth Bank of Australia is retreating from the no-deposit home loan market.

He told ABC Radio that while banks are particularly wary of risk at the moment, tighter home loan approval criteria will be here to stay.

“The era of getting very easy credit to buy a house is over,” he warned.

His comments were echoed by Aussie Loans boss John Symonds, who said that the Commonwealth announcement marks a return to more prudent lending.

However, Johnson went on to warn that with the home loan market shrinking, there is a chance that Aussies will see house prices tumble.

Last month, the Age pointed out that the era of cheap credit cards and easy access to low-interest personal loans had left many Australians facing spiralling debts and eventual bankruptcy.ADNFCR-1761-ID-18887283-ADNFCR