CANBERRA, AAP – The banking watchdog isn’t about to slam new restrictions on lending in the face of rising house prices, a parliamentary hearing has been told.
House prices were rising at their fastest pace in almost 18 years in February and at the same time mortgage lending was at a record level.
Chair of the House of Representatives economics committee and Liberal MP Tim Wilson raised concerns at a hearing on Monday that any new restrictions on lending and rising house prices could impact young first home buyers in particular.
Australian Prudential Regulation Authority chair Wayne Byres said the Council of Financial Regulators – which also includes the Reserve Bank, Treasury and the Australian Securities & Investments Commission – is monitoring the situation.
“It’s not our job, and it’s never been our job, to solve the problem of rising house prices,” Mr Byres told the hearing on Monday.
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What regulators are watching for is to see if there is increased risk taking by the community and by the financial sector.
“That’s not evident at this point, that’s not to say it won’t emerge.”
He said housing is a big part of the balance sheet of the banking system and making sure it is a stable part is important.
Deputy chair of the committee and Labor MP Andrew Leigh asked what impact there would be on the housing market if people were allowed to tap their superannuation to help buy a property?
“You would have to think it would add to the demand,” Mr Byres replied.
“All else being equal, it is likely to push (prices) up, but the size and extent of the increase, it is difficult to tell.”