Here are the opening remarks from Edey and Ellis of the RBA before the Senate Economics References Committee, Inquiry into Affordable Housing (link to the RBA website).
Some headlines:
- Ratio of house prices to incomes is at top of historical range
- APRA* has noted a trend to riskier lending practices
- House prices have risen significantly faster than income
- Repayment burdens not particularly high
- Can’t improve housing affordability by adding to demand
- Targeted assistance can help first home buyers
- Without supply-side response, assistance will boost prices
- Hard to be specific on possible tools
- Caps on loan-to-value ratios are unlikely
- Macroprudential tools need to be carefully targeted
- These are APRA tools – final decision rests with APRA
more to come
*Australian Prudential Regulation Authority (APRA)
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