govt could create the economic conditions to make such a lengthy mortgage a viable product.
Rubbish, it's called public demand.
The banks have tailored their lending to suite the needs of customers, by the way remind me who was in government through these years since you are pointing at an LNP government who aren't in power if you hadn't noticed.1983
Foreign banks were allowed to enter the Australian residential lending market which meant more competition in the mortgage industry.
1989
The distinction between savings and trading banks was removed which meant that a bank could develop many different home loan types from residential to commercial finance.
1990s
The recession that we had to have
In the 1990s, the unemployment rate rose to 11 percent and interest rates reached as high as 17.00% in the early 1990s.
Many businesses collapsed and the demand for credit in the corporate sector declined.
Banks suffered huge losses because of businesses going bankrupt. However, they didn’t suffer much loss in residential lending.
This is largely the reason that the banking system shifted its focus from business lending to home loans.
By 1995, the share of residential lending increased from 30% to 46% and the share of business lending fell from 63% to 48% (RBA, 2010).
