ANZ chief executive Shayne Elliott says homeowners may have to wait until 2025 for interest rates to come down

Homeowners shouldn’t expect any interest rate relief until at least 2025, according to one of the big four banks.

And it’s also “not impossible” that rates actually go up even more before they come down.

ANZ chief executive Shayne Elliott predicted the Reserve Bank would be waiting to see what impact the Albanese Government’s tax cuts backflip would have on inflation before making a decision to change the status quo.

“I think the RBA may be looking at where people spend that tax cut money and the impact,” he told The Australian in a wide-ranging interview.

“Do they save it or spend it? We don’t know.

“So, I wouldn’t be surprised if the rate cuts were in the first half.

“I don’t want to be a doomsayer but you can’t rule out that the next move will be an increase. It’s not a zero chance. It’s not the likely case but not impossible.”

Mr Elliott also told The Australian that strict lending requirements on the big banks were forcing people with “good credit” out of the housing market.

“To give an analogy, it’s a bit like setting a speed limit of 5km/h. So we’ll all be really safe, but nothing will get done. That’s sort of what we’re doing with access to credit,” he told reporter Glen Norris.

“I get it, we don’t want anybody to get hurt but what happens is all those people who wanted a home loan, who probably had good credit and would have paid it back, they can’t get a loan.

“That’s a sad thing

“All these regulations have been added on over the years with good intent but now it’s time to stand back and look at the whole thing. How do we get a bit more common sense back into this? I’m not saying remove all controls but we probably need a review.”

Mr Elliot’s comments come after outgoing National Australia Bank chief executive Ross McEwan had also warned aspiring home buyers were potentially being locked out of the housing market by regulations introduced in response to the damning financial services royal commission.

“Each piece of regulation was put in place for a very, very good reason,” he told a banking summit.

“But it’s the combination of all of these pieces that (makes) you start to think has it gone too far?”

Mr McEwan also said housing approval processes should be standardised across States and Territories with delays at the State level contributing to the housing crisis.

The departing NAB boss said there were some “peculiar issues” happening at the State level, which all had different rules and regulations that had ultimately contributed to slower than desired housing approvals. “We’ve got to get a lot of these impediments out of the system,” he said.

“I’ve always maintained the States need to be faster on the approval process.”

Mr McEwan said there was a deficit of tradespeople needed to build enough houses to increase housing supply and it was critical Australia was bringing in skilled migrants to fill skills deficit in critical industries.

“We desperately need healthcare workers (and) we need to people to work the childcare sector,” he said.

Mr McEwan said productivity in Australia was going backwards and said the nation had become “frightened of industries that are doing well”.

“Where you’re making good money as a bank, you’re pouring money back into the system and growing,” he said.

“I think that’s what we should be celebrating. I think we’ve got a bit ashamed of ourselves.”

Australian Banking Association chief executive Anna Bligh warned lenders could become increasingly risk averse and potential borrowers were being pushed towards non-bank borrowers that had 90-day default rates that were up to four times higher than in the regulated sector.

Ms Bligh said the years-long fallout from the damning financial services royal commission as well as recent crises in the US could be contributing to lenders becoming more risk averse.

“There is a desire from regulators to make sure everything is safe,” she said.

“But I worry that the Australians (who) could be getting their home, building some wealth and getting housing security are being locked out.”