Regulators urged to action over house price growth
Regulators may be forced to step in to cool a surging property market.
A new report from SQM Research has claimed house prices are in danger of continuing to balloon, and that Australia could see double-digit price growth next year, the Australian has reported. According to the Australian, SQM Research managing director Louis Christopher has urged the Reserve Bank and the Australian Prudential Regulation Authority (APRA) to take a more proactive role in cooling the housing market and keeping affordability from spiralling out of control.
“The RBA risks being behind the curve on what is presently happening in the housing market and what is about to unfold. The RBA will need APRA to rein in credit lending once again or lift interest rates, or do both, and they need to take action sooner rather than later,” Christopher said.
Christopher argued that failure to act could lead to out-of-control price growth in 2017.
“Tapping on APRA’s shoulders once again could be a little more complicated this time around as it will need to involve restricting owner-occupier credit growth, which is something the banks will be reluctant to mess with,” Christopher said.