Michele Bullock is an Assistant Governor (Financial System) at the Reserve Bank of Australia, speaking today
Main points (via Reuters)
- household debt well secured against property, holders can afford to service it
- says arrears rates remain low, bank balance sheets more resilient
- risks from a glut of new apartments are elevated, but contained
- liaison suggests settlement failures on apartments have not increased much
- credit conditions tighter than few years ago as banks improve lending practices
- softer demand for loans more important for home prices than tighter credit
- tighter lending standards could be impacting developers of apartments
- prudent lending standards are a good thing, but needs to be a balance
- banks need to continue to lend, will inevitably involve some credit losses
On these:
- 'Holders can afford to service debt' is quite different to expecting household spending to improve (its been soft and thus a weight on economic growth).
- Risk elevated but contained.
- Bank need to lend, losses inevitable.
OK … maybe 'upbeat' isn't quite the right word to use in the headline. Not panicking, but certainly cautious.
Full text: Property, Debt and Financial Stability
- from the text, this: The regulators are not proposing any further tightening in lending standards
That sigh you hear is one of relief (like when someone takes their foot off your neck) from the banks and various lenders.
