The Australian Prudential and Regulation Authority says it remains calm about Sydney and Melbourne’s property markets, despite concerns raised by the Treasury and the RBA about a housing bubble, reports Fairfax Media.
Chairman Wayne Byres on Wednesday said that even if he has the power to use policies that target specific housing markets in Australia, it is not yet time to use them. This power, if used, could prevent bank lending practices from becoming too loose.
The financial regulator, however, agrees that there should be more stringent watch over interest rates in banks for credit cards.
Byres believes that the warning he gave to Australian banks last year is still having an effect.
"They've been co-operative in terms of changing practices. At the time we sent our letter, the growth in investor lending was about 10% but it was accelerating, it was heading towards 11%, 12%, 15%," he was quoted as saying by Sydney Morning Herald.
"It's still hovering around 10% [but] we're arguing around the decimal point here, 10.3%, 10.4%, so I think we've had some moderating impact and I suspect we'll have some more moderating impact over the coming months."