RBA Considering Ways to Address Housing Market Distortion

Reserve Bank of Australia Governor Glenn Stevens signaled he’s considering steps to limit home loans to investors, who are distorting the housing market.

“Investor finance is growing at double-digit rates,” which is a concern, Stevens told an economics forum in Melbourne today. “I have certain skepticism 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.”

Australia’s central bank is discussing possible measures with other regulators to strengthen lending practices, it said yesterday in its semiannual financial stability review. Policy makers have stepped up warnings on a hot housing market in Sydney and Melbourne, saying accelerating price gains in the country’s two biggest cities may threaten an economy where interest rates have been cut to a record low.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.