Looks like its bad news, good news around ANZ’s Australian chief Phil Chronican, who yesterday endorsed the sense of macroprudential rules. From The Age:
ANZ bank’s Australian boss, Phil Chronican, says tougher credit rules for banks may be a ”sensible” option if house price growth becomes unsustainable, though the property market is currently nowhere near that point.
Amid a debate over the rising housing market, Mr Chronican acknowledged property prices were ”undoubtedly high relative to many other markets” and expensive compared with other assets.
While he believed concern of a housing bubble was ”overstated”, he said that if prices surged for several years there may be a case for ”macroprudential” policies.
”I do understand that probably only as a temporary measure, there might be circumstances under which such a thing might be a sensible thing to do,” Mr Chronican said at an American Chamber of Commerce in Australia function in Sydney.
”Interest rates, at the end of the day, are a very blunt instrument. They affect all sectors of the economy and all regions of the economy evenly, even though the issues that you’re trying to manage might be quite isolated.”
…Mr Chronican said he did not believe regulators were ”anywhere near” needing to impose tougher lending rules at the moment.
Plenty of sense there. I’ll only add that there is absolutely no point in waiting until the need is pressing. By then it’s too late. If the banks see it as a fundamentally sensible idea then let’s get on with it.
Just as the RBNZ is, from Banking Day:
The Reserve Bank of New Zealand has advised Finance Minister Bill English that its limit on low-deposit lending could force around 25 per cent of first-home buyers (around 7000 borrowers) to delay or downsize their home purchase.
…English said the bank had advised that up to 12,000 would get a loan under the new limit and the remaining 6000 to 8000 would have to choose to either “look for a cheaper property or delay their purchase while they save a higher deposit.”
They’ll be better served by stable prices and economy that they can save in with reliable outcomes. But even better, the RBNZ is looking at specifically targeting investors:
The Reserve Bank of New Zealand has detailed more of its thinking behind its limit on low deposit lending, saying in a briefing paper it is “learning by doing”, to some extent, and may look at fresh “targeted interventions”.
…”An example would be targeting housing investors. The Reserve Bank is improving its capacity to undertake targeted interventions: for example, new data collections are being put in place, which will provide breakdowns of housing lending by categories such as investors, first-home buyers and businesses.”
Magnificent!
