It’s official, macroprudential mortgage curbs are coming

The Council of Financial Regulators (CFR), which is the coordinating body for Australia’s main financial regulatory agencies and comprises APRA, ASIC, RBA and Treasury, has released its Quarterly Statement, which confirms that macroprudential mortgage curbs are on their way [my emphasis]:

The Council continued its dialogue on housing credit conditions and associated risks. Housing credit growth picked up over the first half of the year among both owner-occupiers and investors. The recent lockdowns have reduced transactions and new listings, but prices are still rising briskly in most markets. Commitments for new housing loans remain at a high level, suggesting that credit growth is likely to remain relatively strong. The Council is mindful that a period of credit growth materially outpacing growth in household income would add to the medium-term risks facing the economy, notwithstanding that lending standards remain sound. Against this background, the Council discussed possible macroprudential policy responses. APRA will continue to consult with the Council on the implementation of any particular measure. Over the next couple of months, APRA also plans to publish an information paper on its framework for implementing macroprudential policy.

The above statement is rather reactive rather than proactive, which suggests APRA will be measured in its approach.

The sooner APRA cracks down on risky mortgage lending the better. There is no benefit in waiting until the situation deteriorates further. Prevention is always better than cure.

Unconventional Economist


  1. Get in now before its too late!
    Also, only a matter of time before our neighbour to the north pulls their money out of their shaky housing market and into safe haven OZ

      • Yep. Hate to say it but Sydney and Melbourne look attractive to higher middle income people in T1 Chinese cities

        • Arthur Schopenhauer

          There was an English journalist and recent immigrant referring to Australia as a ‘Lifestyle Superpower’ on the ABC’s RN Saturday morning show. Maybe it is.

    • who are they going to sell to, en-mass ? and if they all sell en-mass, what does that do to the price of the rest of the housing / apartment stock in china on aggregate ?

    • Who wants to go halves in a logistics business specializing in pallets of unwashed cash? Its a fairly simple business, we take 10% off the pile of cash and then forward the rest as follows.

      Deliver To:
      Australian Housing

      China (中国)

  2. Goldstandard1MEMBER

    Even though it’s mostly smoke and mirrors, the great news is that it won’t take much to lower FOMO that prices will boom forever. This is excellent signalling because worse is coming.

    • What’s the chance of being pro-cyclical with MPLOL into a downturn that is coming anyway (OK, I should know by now that they never do…)…damn, I just over-thought it 😉

      • Goldstandard1MEMBER

        My theory is they now know bad news and coming and they need to show some ‘we tried but people got themselves in trouble’ to save face. Bring it on

        • Exactly this is virtue signalling and getting ready to pass the buck.As we’re the calls for a review of the RBA


            That way we can successfully push blame onto the punters themselves when the sherrif is there to take the house back for the bank!

          • Jumping jack flash

            “…when the sherrif is there to take the house back for the bank”

            Nah. Though that may happen it isn’t their real intention.
            I’m guessing it will only affect new borrowers and they’ll trot out DTI constraints instead of only using LVR to determine borrowing capacity.

            Even so, DTI will be set at 6 or 8x income. 10x income need not apply – if you’re trying to get a mortgage that’s 10x income perhaps set your sights lower and try and find a cheaper house instead?

  3. It’s as if an election is coming and they want to be seen to be doing something about “house prices” LOL.. 🙂

    • Mining BoganMEMBER


      Unfortunately the horse that bolted has had grandchildren that have died of old age. And the gate still hasn’t closed.

      • There is no gate. There never was a gate. In the past, all there was, a line of electric tape, about a foot off the ground. Even that is now gone, sold to the highest bidder.

    • Letters growers across the country have rejoiced as they prepare for what will be a bumper crop at favorable prices.

  4. I have a dream that one day, MB shall not be judged on the character of the comments, but that all comments shall be


  5. Arthur Schopenhauer

    It’ll be believable if they do something concrete, like outlaw ‘Mortgage Insurance’. Until then, just the usual bluff and bluster.

  6. Jumping jack flash

    “The Council is mindful that a period of credit growth materially outpacing growth in household income would add to the medium-term risks facing the economy”

    Oh they’re only about 14 years too late!

    They’re miffed because they’ve only just realised that mortgage debt doesn’t do squat for consumption. The “wealth effect” is a bankers’ fantasy and simply equated to the thought process of: “while we’re taking on the largest pile of debt in our lives, we may as well take on MOAR DEBT and spend it on stuff!”.

    When the data is obfuscated by the modest consumption increases from immigration you can see how they came to that conclusion, plus, they liked it. It kind of justified the mortgage debt orgy and the high house prices it caused.

    So what are they going to do?
    Let the jawboning and sabre-rattling commence, obviously.

      • Jumping jack flash

        Yes. Moar debt!
        Not just vehicles but furniture, sheds, etc.

        Its just all debt spending at the end of the day, but the mortgage principal that is used to buy the house doesn’t do much for consumption in and of itself because the “lucky” recipient of the lump of debt will usually plough it back into another house after paying the remaining principal and interest owing on their current mortgage of course, and the strapped borrower who’s flat out paying for the mortgage doesn’t feel richer at all, but they can go and grab a heap of those interest free credit cards…

        • Didn’t I help all those tradies to buy a flash new ute during COVID-1? Instant depreciation or something like that?

          • Jumping jack flash

            Possibly. That would be an exception rather than a rule though.

            Generally speaking, taking on a massive wad of debt to buy a house doesn’t do a lot for consumption because most of that debt is recycled into repaying existing debt and its interest, and obtaining new mortgages. At best it may make people more inclined to take on additional debt to use to consume, but at the end of the day it is all debt and nobody is actually any “wealthier” as such, just more indebted than ever.

            Unless that is what the banks actually meant by the “wealth effect”?
            And if so, well played banks, well played.

          • @JJF that is what “aspirational” means; the willingness to tolerate vertigo-inducing amounts of debt.

  7. The watchfulness is terrific!
    Bunnings clear to buy tiles chain, with a caution
    Competition watchdog allows Bunnings to buy Beaumont Tiles but will ‘carefully’ watch any takeovers of more specialist retailers.