The banking regulator warned the incoming Albanese government that it would face "heightened" risks in the housing market as interest rates rise.The banking, insurance and superannuation regulator prepared an incoming-government brief in May
APRA said banks were well placed to weather a housing downturn although "a number of households" would be in "financial distress" The 48-page document laid out a range of issues APRA was looking at across the banking, insurance and superannuation industries it regulates, but housing was front and centre."A sustained period of record low interest rates has seen strong growth in housing prices in recent years and this has been high relative to advanced economies globally. Households' debt levels relative to income are also elevated, both historically and internationally.
"The faster-than-expected emergence of inflationary pressures and a rising interest rate environment is likely to place some strain on household balance sheets and place a number of households in financial distress," it noted.
Elbow does not care...
'A sustained period of record low interest rates has seen strong growth in housing prices in recent years..' Gaslighting It was APRA doing two things: 1. changing rules allowing banks to lend more and 2. waiting too long to make adjustment when prices surged. APRA 💯 to blame.
No problem, they will just blame the previous government for them ignoring the memo. 😜
RBA and APRA...total failure in regulating housing/economy at the expense of the public during LNP reign...but let's warn the incoming govt of 2 months...oh and the banks will be OK. Great job, well done Angus...
JEChalmers must have missed that memo - he appears stunned by the state of the economy.
If APRA had kept the assessment rate at 7% after the 2019 election, borrowers would now be in a stronger position to handle the RBA raising rates. APRA reduced the assessment rate in 2019 to pump house prices.
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Source: FinancialReview - 🏆 2. / 90 Read more »
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