Industry experts are confident the interest rate cut initiated by the Reserve Bank of Australia will help ignite already-hot property markets, noting that regulators are “keeping a tight leash on lenders” to prevent a housing bubble.
“APRA (Australian Prudential Regulation Authority) is in there talking to all the banks and having a very, very good look at what they are doing ... so overall I’m very comfortable where the housing market is and the market in Sydney is starting to behave more sensibly,” said Aussie Home Loans founder John Symonds.
While Symonds admits there are still housing markets in Australia with price increases, he insists that overall, prices are reasonable.
“Sure, there’s still some areas where prices are going up, but there’s plenty of other areas where they’ve gone sideways and overall it’s settled down to a more acceptable level of growth so I’ve got no concerns about a housing bubble. Banks have behaved in terms of their quality controls during this cycle,” he added.
Jamie McPhee, chief of ME Bank, echoes Symonds and assured that the APRA is closely watching the banks. He predicts another rate cuts by the RBA as well.
“Underwriting standards of banks in this country is very strong so, yes, house prices, there’s no doubt, have appreciated but I think still the quality of lending is still very strong so I’m not concerned about their being a bubble,” said McPhee.