Council of Financial Regulators continues to monitor housing prices, but no tightening yet of lending rules
The Council of Financial Regulators says its will continue to closely monitor housing prices and consider possible responses should lending standards deteriorate and financial risks increase.
The council is the coordinating body for Australia's main financial regulatory agencies: the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investments Commission (ASIC), the Australian Treasury and the Reserve Bank of Australia (RBA), with the aim to promote stability of the Australian financial system and support effective and efficient regulation by Australia's financial regulatory agencies.
Its latest quarterly statement issues today arose from its quarterly meeting on Friday, 26 February where discussions focused on the financial sector's role in supporting recovery from the COVID-19 pandemic.
Council members discussed credit conditions.
They noted housing credit had "picked up a little and was growing at a moderate pace."
"Commitments for new owner-occupier housing loans have increased strongly in recent months, consistent with most other indicators of housing market activity.
"There has been some increased availability of mortgage finance recently, though lending standards are generally being maintained at this stage."
The council noted its places a high emphasis on lending standards remaining sound, "particularly in an environment of rising housing prices and low interest rates.
"It will continue to closely monitor developments and consider possible responses should lending standards deteriorate and financial risks increase."
The March RBA minutes repeated, from the February statement that, “investor and business credit growth remain weak.”
But the March minutes added the warning that “lending standards remain sound and it is important that they remain so.”