Housing in the spotlight as pressures rise | Liverpool City Champion
The next few days will see a series of economic indicators provide an update on the state of Australia’s booming housing market in terms of prices, loans and construction.
There are growing concerns about the impact of record interest rates on loans as borrowers chase after steadily rising house prices.
The International Monetary Fund, in its latest report on Australia, warned that this raised concerns about affordability and financial stability.
It recommends tightening lending standards and reforms to boost housing supply, as well as targeted support to low-income households to improve housing affordability.
Australian financial regulators have been monitoring the impact of low interest rates on house prices and mortgage demand for some time.
New home loans with debt at least six times greater than income hit a record 22% in the June quarter, down from 16% a year earlier.
Regulators are now considering further measures, with a report released Wednesday saying they were “aware that a period of credit growth significantly outstripping household income growth would increase medium-term risks facing the economy, even if lending standards remain sound. “.
“In this context, the Council discussed possible macroprudential policy responses,” the Board of Financial Regulators said in its quarterly statement.
The Australian Prudential Regulation Authority plans to publish an information document on its framework for implementing macroprudential policy in the near future.
Reserve Bank Deputy Governor Michele Bullock told a conference last week that “sustained strong credit growth outpacing income growth could lead to vulnerabilities in bank and household balance sheets.” .
The bosses of the Commonwealth Bank and the ANZ told a federal parliamentary committee that they were already cautious in their lending criteria.
The RBA will release its monthly credit data for August on Thursday, which measures debt build-up in various sectors of the economy.
In July, housing credit grew at its fastest annual rate since May 2018.
The Australian Bureau of Statistics will also release construction approvals for August.
Economists’ forecasts focus on a further five percent drop in the month after a sharp 8.6 percent drop in July as the benefits of the federal government’s successful HomeBuilder program continue to ease.
On Friday, the CoreLogic Home Value Index for September will be released, along with the ABS lending numbers.
The ABS will also release job vacancy figures for the three months through August on Thursday.
Job vacancies have been low in recent months due to coronavirus closures in major states, which has already resulted in a sharp drop in the number of people in employment.
Associated Australian Press