Australian financial regulators believe it is too early to assess the impact of the recent tightening of rules on home loan applications amid a turbulent housing market.
In October, the banking supervisory body, the Australian Prudential Regulation Authority, ordered lenders to assess the ability of new borrowers to repay their loans at an interest rate at least three percentage points above the rate. of the loan product they are applying for.
This compared to the 2.5 percentage point maintenance buffer that was commonly used.
The Board of Financial Regulators, at its quarterly meeting this week, reiterated its support for the move, agreeing that given the risks that have accumulated, the move will help support the resilience of new borrowers and lenders.
“It is still too early to assess the effects of the measure; members will continue to monitor developments closely,” the council said in a statement Thursday.
He said home loan growth remained strong in the second half of the year.
While new loan commitments have eased, they remain at a high level, suggesting that credit growth will continue to be relatively strong, with further increases in new loans to investors.
“Housing prices continue to rise rapidly in most markets, although at a slightly slower pace overall than at the start of the year,” the council said.
House prices have increased more than 20 percent nationally in the past year.
The board is made up of APRA, the Australian Securities and Investments Commission, the Reserve Bank of Australia and the Treasury.