
Most read
‘Optimistic borrowers’ could endanger housing market, RBA says...
‘Optimistic borrowers’ could endanger housing market, RBA says...

Latest Podcast
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...

Resources
There is $17.5 billion in lost and unclaimed super across ...
There is $17.5 billion in lost and unclaimed super across ...
Invest
RBA takes aim at interest-only loans
The Reserve Bank has thrown its support behind the latest measures limiting interest-only loans, with RBA governor Philip Lowe hinting that current tax arrangements may be responsible for Australia’s record household debt level.

RBA takes aim at interest-only loans
The Reserve Bank has thrown its support behind the latest measures limiting interest-only loans, with RBA governor Philip Lowe hinting that current tax arrangements may be responsible for Australia’s record household debt level.

Speaking at the Reserve Bank board dinner last night in Melbourne, Mr Lowe said the move by regulatory bodies APRA and ASIC to tighten interest-only lending was supportive of a more sustainable and resilient housing market.
“Like the earlier ‘speed limits’ on investor lending, these new requirements should help the whole system pull back to a more sustainable position,” Mr Lowe said.
“Hopefully, the changes might encourage a few more people to think about the merit of taking out very large interest-only loans when interest rates are near historical lows.”
APRA said last week that interest-only loans should not exceed 30 per cent of new loans, while institutions have been instructed to limit those with high loan-to-valuation rations (LVRs).
Mr Lowe said the popularity of interest-only loans was fuelled in part by the flexibility of Australian mortgages.
“Many people with interest-only loans make significant payments into offset accounts rather than explicitly paying down principal,” he said.
“This flexibility, which is of value to many people, isn’t available in most countries.”
Mr Lowe also hinted that current tax arrangements may have contributed to Australia’s ongoing household debt issue, which has now risen to 187 per cent of income.
“A second factor is the taxation arrangements that apply to investment in residential property in Australia.”
However, despite the RBA welcoming “these and other prudential measures”, Mr Lowe maintains there are bigger drivers of the housing market.
“The availability of credit is undoubtedly a factor that can amplify demand, but it is not the root cause,” he said.
“It is hard to escape the conclusion that we need to address the supply side if we are to avoid ever-rising housing costs relative to our incomes and to avoid the attendant incentive to borrow that is created by rising housing prices.”

Property
Policy failures see houses become unattainable for young Australians, minister says
Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now unable to afford what their parents could, a minister has said. ...Read more

Property
House prices to grow by 25% over 3 years
New research is predicting a large gain in property prices of around 25 per cent through to the end of 2023, driven mainly by low interest rates. ...Read more

Property
Strict cap on short-term rentals delayed following criticism
Following widespread criticism from councils and online rental companies, the introduction of NSW’s planned holiday rental code of conduct has been pushed back by three months. ...Read more

Property
Melbourne becomes Australia’s 2nd most affordable rental market
While most capital cities saw house rents soar to new record highs over the first quarter of 2021, Melbourne continued to lag behind – becoming the second most affordable capital city to rent in Aus...Read more

Property
Why home buyers are now more open to high-priced properties
Buyers are more likely to spend more to secure a property as their preferences shift towards bigger spaces with higher price tags, recent data has shown. ...Read more

Property
Government brushes aside RBA’s debt blowout warning
The government said it is not concerned about the RBA’s warning that the financial system could be rocked if there’s a debt blowout, in fact it is “very pleased” that confidence levels are lea...Read more

Property
Have first home buyers been pushed out of the market?
Latest figures have shown a monthly decline of over 3 per cent in first home buyer activity, but levels still remain at their highest since 2009. ...Read more

Property
‘Optimistic borrowers’ could endanger housing market, RBA says
The Reserve Bank of Australia has issued a caution, noting that optimistic borrowers could lead to a deterioration in the quality of lending, increasing the risk in the housing market. ...Read more

Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now

Raging floods, the tech stock bubble and the ongoing SG debate
Listen now

Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now

The continued property boom, ethical investing and engaging with your super fund
Listen now

Property
Policy failures see houses become unattainable for young Australians, minister says
Australia’s booming house prices are the result of the government’s failed policies, with the younger generation now unable to afford what their parents could, a minister has said. ...Read more

Property
House prices to grow by 25% over 3 years
New research is predicting a large gain in property prices of around 25 per cent through to the end of 2023, driven mainly by low interest rates. ...Read more

Property
Strict cap on short-term rentals delayed following criticism
Following widespread criticism from councils and online rental companies, the introduction of NSW’s planned holiday rental code of conduct has been pushed back by three months. ...Read more

Property
Melbourne becomes Australia’s 2nd most affordable rental market
While most capital cities saw house rents soar to new record highs over the first quarter of 2021, Melbourne continued to lag behind – becoming the second most affordable capital city to rent in Aus...Read more

Property
Why home buyers are now more open to high-priced properties
Buyers are more likely to spend more to secure a property as their preferences shift towards bigger spaces with higher price tags, recent data has shown. ...Read more

Property
Government brushes aside RBA’s debt blowout warning
The government said it is not concerned about the RBA’s warning that the financial system could be rocked if there’s a debt blowout, in fact it is “very pleased” that confidence levels are lea...Read more

Property
Have first home buyers been pushed out of the market?
Latest figures have shown a monthly decline of over 3 per cent in first home buyer activity, but levels still remain at their highest since 2009. ...Read more

Property
‘Optimistic borrowers’ could endanger housing market, RBA says
The Reserve Bank of Australia has issued a caution, noting that optimistic borrowers could lead to a deterioration in the quality of lending, increasing the risk in the housing market. ...Read more