Chris Joye is maintaining the rage at the AFR:
… the Reserve Bank of Australia has seen the writing on the wall.
It is clear the central bank is increasingly exercised about the prospect of “imbalances” (aka bubbles) emerging in Australia’s highly leveraged housing market. As it should be.
In its semi-annual Financial Stability Review published on Tuesday, the RBA has bluntly warned banks that it is “particularly important” they maintain “prudent risk appetite and lending practices, especially in the current low interest rate environment.”
The RBA makes a special effort to highlight potential hazards in the spruiker-prone New South Wales property market, commenting that the recent “increase in investor activity appears to have been particularly sharp”, with investor loan approvals at their highest level since just after the last big boom in 2004.
…Last week some alleged that the RBA was relaxed about current housing market dynamics. It is unlikely they will do so again.
After Malcolm Edey’s other-worldly comments last week I’m not so sure. This will not be enough. Capt’ Glenn needs to make another Sunrise appearance and APRA needs to very publicly move on LVRs.
