Australia’s RBA mulling more steps to curb housing investment lending
Regulators examine bringing in new measures to target 'imbalances' in investment loans
Australia's central bank said regulators were considering new steps to rein in lending for housing investment and an initial announcement was likely by the end of the year.
Reserve Bank of Australia (RBA) assistant governor Malcolm Edey said the aim would be to avoid a run-up in house prices that could potentially spill over into a bust that hurt household wealth and spending.
Edey said the Australian Prudential Regulation Authority had already tightened its oversight of lending but was now considering "turning up the dial".
"We are discussing with APRA steps that might be taken to reinforce sound lending practices, particularly for investor finance, though not necessarily limited to that," Edey said. A preliminary announcement on the steps was likely to come before the end of the year, he added.
The RBA last week surprised many by saying it was open to tougher rules on lending for housing investment given rapid loan growth and rising home prices. Such macro-prudential measures aim to limit the build up of leverage and risk-taking in the banking system as a whole rather than at individual banks.
That led Senators to invite the RBA to a committee meeting to discuss the new measures with an eye to making sure they would not harm housing affordability or the supply of new homes.