Treasurer Scott Morrison says housing market poised for 'safe landing' after regulatory curbs
Regulatory tightening is working to cool the overheated property market without a hard landing, according to Treasurer Scott Morrison.
"The data shows to date that we are moving towards a safe landing when it comes to housing markets in Sydney and the pendulum swinging back in the favour of home owners and first home buyers, which is good news," Morrison said in Sydney on Monday, according to The Australian Financial Review.
In March, the Australian Prudential Regulation Authority announced restrictions on interest-only loans in response to record high household debt levels and the measure was has been "fully supported by the government”, he said.
Interest-only loans must be restricted to 30 per cent of new residential mortgage loans, APRA said.
"We are seeing the outcomes of that now; that very careful approach that we have been encouraging and supporting now having this impact in the markets in Sydney and in Melbourne where things are easing off to a safe landing, not the hard landing that Labor's policies would deliver."
However, the CoreLogic Home Value Index recorded a recovery from the 1.1 percent fall in May, with an 1.8 percent rise in capital city dwelling values over June, with Sydney home prices up 2.2 percent.
Meanwhile, Australian Bureau of Statistics data showed building approvals fell 5.6 per cent in May, the second fall in three months.
Asked whether he was comfortable with how the housing market was tracking, Morrison said the data on housing was "an endorsement of the careful approach the government has been taking”, the AFR reported.
He again reiterated that the sober, careful approach “is providing that very calm and considered way to deal with what is a very real issue for so many Australians”.
Morrison had advocated a scalpel-like approach to the housing affordability issue.
"I'm encouraged by the fact that we are seeing more owner occupiers, first home buyers coming back into the market. We want to see that happen."