Housing credit continued to rise in September with lending to investors again the prime mover, adding further fire to the hot debate surrounding regulatory measures and if they are needed to take the heat out of the Australian residential property prices.
New figures from the Reserve Bank of Australia showed growth in the owner-occupier and investor housing sectors. Overall private sector credit also continued to increase in September, rising 0.5 per cent for a 12-month gain of 5.4 per cent – the highest yearly figure since February 2009.
Doing so may keep the housing market from boiling over while at the same time keeping interest rates low to help the rest of the economy.
The housing figures from the RBA’s data today showed:
Nationally, housing prices have grown at 9.3 per cent over the past year. The RBA figures show that investor housing loans now account for roughly 50% of housing loans (excluding owner-occupier refinancing) – a record high. The data suggests that Investor activity has been particularly popular in New South Wales.
In September, RBA governor Glenn Stevens said macro-prudential tools are limited in use but he was open to considering them.
“I have certain scepticism about macro-prudential tools as a panacea, but I remain open to using them if it seems sensible to do so and that’s the kind of thing we have in mind right now,” he to
ld the Melbourne Economic Forum.
At the same time the RBA’s Financial Stability Review confirmed the central bank was talking with other regulators, including the banking regulator the Australian Prudential Regulation Authority, about steps to crack down on risky lending.
RBA assistant governor Malcolm Edey told a Senate committee there would be more to say about the discussions with regulators in “due course”. He indicated that there might be changes before the end of the year.
The three macro-prudential measures considered most likely to be implemented are;
Such caps have been implemented in New Zealand but are considered unlikely to be implemented in Australia.
Source – Kiama Independent , Lake Times, The Sydney Morning Herald