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APRA eliminates 'aggressive lending practices'

APRA chairman Wayne Byres has reaffirmed the prudential regulator’s stance on mortgage lending in a speech before the Senate Economics Legislation Committee in Canberra.

Appearing before the committee last week, Mr Byres said “it is no secret” that APRA devoted much attention to housing lending in 2015, noting “that is unlikely to change in 2016”.

“Throughout 2015, we worked extensively with housing lenders to reinforce sound residential mortgage lending standards,” he said.

“From our perspective, this work has had a positive effect: serviceability assessment standards have improved across the industry, lenders that were previously the least conservative have shown the greatest improvement, and some of the most aggressive lending practices that we observed have been eliminated.”

APRA’s efforts have also likely played a role in the slowdown in the growth of investor lending, Mr Byres said.

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“Looking through the noise in the data due to reclassifications, investor lending grew by around 8.5 per cent over 2015,” he said.

“While this has moderated over recent months, lending to owner-occupiers has accelerated, such that the growth in the total volume of housing finance was slightly higher over the past year compared with the previous one.”

Mr Byres said sound standards for mortgage lending will remain an important area of focus for APRA and also continue to be a key focus for many international regulators.

“We are continuing to work to address to our satisfaction any lingering issues within individual lenders,” he said.

“We are also turning our mind to how we might entrench recent improvements and lessen the level of supervisory resources we devote to this topic in the future.”

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[Related: APRA to simplify mortgage securitisation rules]

 

APRA eliminates 'aggressive lending practices'
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