Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
SUBSCRIBE TO OUR NEWSLETTER SIGN UP
Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

APRA’s ‘one size fits all’ lending curbs are dangerous: HIA

apra

apra
Lucy Dean 1 minute read

Regulatory restrictions on investor lending have been condemned by a senior economist as a dangerous application of a ‘one size fits all’ policy.

Shane Garrett, senior economist at the Housing Industry Association (HIA) pointed to significant variations in housing price growth across the country, especially compared to the hot markets of Sydney and Melbourne, as underlining the “dangers” of applying broad policy remedies.

Acknowledging figures from the Australian Bureau of Statistics (ABS) that showed that housing prices in Australia’s capital cities grew by 10.2 per cent over the year to March 2017, Mr Garrett said there was, however, evidence that in the months since then, price growth had cooled.

“Since March 2017, dwelling price growth has slowed following the introduction of additional restrictions by APRA [the Australian Prudential Regulation Authority] and increased barriers to foreign investor participation imposed at federal and state level,” he said.

Adding that dwelling price growth in markets outside of Sydney and Melbourne had been “much weaker” in the first quarter of 2017, Mr Garrett said the solution to the country’s “considerable” housing affordability challenge lies in creating a “sufficient supply” of new properties in a “more cost effective manner.”

He added: “We are concerned that some recent policy changes could undermine this objective.”

In March, APRA introduced supervisory measures to curb interest-only lending. At the time, HIA welcomed the measures, with chief economist Harley Dale describing them as a “cautious and sensible approach to the home lending environment nationally."

However, Mr Dale added that the housing market in Australia is not “homogenous,” and pointed to banks’ ability to apply APRA’s rules with a “considered and targeted approach” as a means of avoiding a negative impact on struggling markets.

Advertisement
Advertisement

PROMOTED FEATURES


Housing affordability measures were also announced in the 2017/18 federal budget, including options for first home buyers to make voluntary contributions of up to $30,000 to their superannuation accounts to go towards buying a house, while limits on foreign property investors were also introduced.

[Related: Brokers slam APRA’s ‘sledgehammer’ approach to IO loans]

APRA’s ‘one size fits all’ lending curbs are dangerous: HIA
apra
TheAdviser logo
apra

 

more from the adviser
parliament Responsible lending laws to be scrapped

The federal government has revealed that it will move to overhaul...

Plenti team ta Plenti lists on the ASX

The non-bank lender has commenced trading on the ASX after succes...

fight boxing gloves Brokers maintain low level of AFCA complaints

Over 7,000 complaints relating to home loans were lodged with AFC...

FROM THE WEB