From Australia’s Sydney Morning Herald this morning: Reserve Bank’s rock and hard place
- The increase in lending on investment properties is now running at its fastest for six years – indeed since before the global financial crisis … it’s placing plenty of pressure on the regulators and the Reserve Bank to intervene.
- The Reserve Bank is caught between a rock and hard place. It’s unable to increase interest rates for fear it would be at the expense of economic growth but is concerned that the property market bubble could ultimately burst and create another large problem, a debt hangover for property buyers and a higher – potentially damaging – level of delinquencies for banks.
- RBA governor Glenn Stevens has certainly been throwing out plenty of hints that something may need to be done.
- Suggestions borrowers would need to increase the proportion of the deposit relative to the value of the property appears to be gaining currency.
More at the link
