subscribe to our newsletter
Regulators tipped to loosen lending restrictions in 2018

Regulators tipped to loosen lending restrictions in 2018

Moody’s has suggested that Australia may be encouraged by New Zealand’s actions to loosen macro-prudential measures.

In a 14 December report, Moody’s noted that housing regulation in New Zealand tends to lead Australia’s by at least a year.

The ratings agency noted that the Reserve Bank of New Zealand was on the front foot trying to cool certain heated housing pockets, such as Auckland, well before APRA introduced housing-targeted measures, even though both economies were experiencing strong price growth in some areas.

“Just recently, the RBNZ announced it had eased some macro-prudential measures in light of softer house price growth. Now that Australia’s housing market has cooled, APRA may follow suit with minor reversals in the next year,” Moody’s said.

In a 15 December blog post, Digital Finance Analytics (DFA) principal Martin North said that he is not convinced that APRA will scale back its macro-prudential measures, given credit for housing “is still running at three times [the] income growth and at very high debt levels”.

“I find it weird that there is a fixation among many on home price movements, yet the concentration and level of household debt (and the implications for the economy should rates rise) plays second fiddle,” Mr North said.

“Also, the NZ measures were significantly tighter, and the recent loosening only slight (and in the face of significant political measures introduced to tame the housing market). So, we think lending controls should be tighter still in 2018.”

Regulators tipped to loosen lending restrictions in 2018
mortgagebusiness logo

Latest News

The financial services royal commission has heard evidence of further wrongdoing from several lenders, including three major banks, as the p...

A handful of young Australians working in the mortgage and finance industry have been recognised for their excellence at the inaugural Young...

CBA’s decision to offload its wealth business should come as no surprise to anyone. Running a “simple” outfit has now become the chief...

Promoted Stories

podcast

LATEST PODCAST: The rise of mortgage prisoners, further regulation and the importance of good advice

Do you expect access to credit to get harder this year?