Loans concern but no action: APRA
AUSTRALIAN Prudential Regulation Authority chairman Wayne Byres has expressed concern about a rise in high debt-to-income lending, but stopped short of saying policy measures were required to cool housing market activity.
Appearing before a parliamentary economics committee on Friday, Mr Byres was peppered with questions on a range of topics including the bumper housing market.
“We are weighing up a raft of different considerations,” he said.
“There are risk metrics that tell us different things. The issue of concern at present is that there is an increase in high debt to income lending, but it’s offset against a number of other metrics which are going in a more positive direction from a prudential perspective.
“Credit growth is picking up. In the most recent quarter the risk metrics that we look at are sort of a mixed picture, interest-only loans have come down as a share of new lending, high LVR (loan-to-value ratio) loans have come down … offset balances are high and banks are not overriding policies to any serious degree.”
Mr Byres said banks’ balance sheets remained strong and lending standards were
being sustained with no obvious “poor quality” lending happening, although the situation was complicated by lockdowns across several states and negligible population growth.
The latest REA Group report this week found that the volume of email inquiries to agents on realestate.com.au reached a historic high in August.
While the rate of house price growth slowed in August, the latest CoreLogic report showed residential property prices had risen almost 11 times faster than wages growth over the past year.
Australian housing values are 15.8 per cent higher so far this year, and are 18.4 per cent above levels in August 2020.
APRA’s quarterly figures showed the rise in loans being written at debt-to-income ratios of more than six, reflected the biggest jump since collection of the data began.