NAB raises mort­gage rates

New Straits Times - - Business | World -

SYD­NEY: Na­tional Aus­tralia Bank (NAB) be­came the first of the coun­try’s Big Four lenders to raise mort­gage rates yesterday, a move that in part will be wel­comed by reg­u­la­tors des­per­ate to cool run­away real es­tate prices.

NAB, Aus­tralia’s No. 4 lender by mar­ket value, raised in­ter­est rates on res­i­den­tial in­vest­ment loans by 25 ba­sis points to 5.80 per cent to clamp down on the “strong growth” in the seg­ment, it said in a state­ment.

But it also raised owner-oc­cu­pier loans by seven ba­sis points to 5.32 per cent, a move that an­a­lysts said could draw flak from con­sumers and politi­cians.

Ear­lier this week, a se­nior cen­tral banker sig­nalled reg­u­la­tors were ready to im­pose tighter lend­ing re­stric­tions to ward off risks in a hous­ing mar­ket that has seen prices grow at their fastest since 2010.

Home prices in ma­jor cities jumped 11.7 per cent in the year through Fe­bru­ary, while in Syd­ney they have shot up 18.4 per cent.

While au­thor­i­ties should wel­come moves to dampen spec­u­la­tion in prop­erty, high loan rates for home oc­cu­piers could risk hurt­ing the broader econ­omy at a time when it still needs sup­port. Reuters

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