PIMCO: Aussie property prices to keep falling

Last year PIMCO was very bearish on Aussie property:

Mortgage availability has tightened due to property-cooling measures and closer bank scrutiny. Over the past few years, the Australian Prudential Regulation Authority (APRA), the country’s banking regulator, has introduced various macroprudential measures to cool down the housing market. Notably, in late 2014 APRA required that banks cap the annual growth rate of loans to individual real estate investors to 10% from close to 20%. In early 2017, it required that banks limit interest-only loans as a share of mortgage underwriting flow to 30%, down from about 40%.

In addition, last December the Australian government established the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry to investigate financial sector misconduct. Under close regulatory scrutiny, banks have raised their underwriting standards. For example, they have incorporated more rigorous living-expense assumptions when assessing mortgage eligibility.

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