- Financial conditions for business have improved, deleveraging has run its course
- Total mortgage buffers equal to around 24 months of payments at current interest rates
- Many households still paying down mortgages more quickly than required
- Indicators of household financial stress remain low, prudence still needed
- RBA sees little danger of a glut in new housing supply that would pressure home prices
- But pick up in home investment needs watching, cyclical rise in prices cannot go on forever
- Present housing conditions do not represent a risk to financial stability
- Lending standards broadly steady, but signs some banks easing standards to selected borrowers
- Important that banks do not loosen lending standards, especially on home loans
- Local banking system performing strongly, well placed to meet capital needs
Immediate headlines via Reuters
Full text here: Financial Stability Review
The Reserve Bank of Australia’s Financial Stability Review is released twice per year and contains an assessment of conditions in the financial system and potential risks to financial stability.
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This is noteworthy too, a risk:
“… with household gearing and indebtedness still around historical highs and unemployment trending upwards, continued prudent borrowing and saving behaviour is needed to underpin the financial resilience of households.”
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