APRA keeps home loan buffer at 3 percentage points
Make us a preferred source
Make us a preferred source on Google
The news: The Australian Prudential Regulation Authority (APRA) has maintained its current macroprudential policy settings citing high household indebtedness and a pick-up in credit growth.
The numbers: The regulator will keep the mortgage serviceability buffer at 3 percentage points, while the countercyclical capital buffer will remain at 1% of risk-weighted assets. It will not introduce any limits on lending or constraints on capital distributions.
The context: The prudential regulator said it had decided to maintain the current policy settings — despite the banking sector urging more leeway — taking into account the high household indebtedness and a pick-up in credit growth, even as cost-of-living pressures persist and the jobs market weakens.
What they said: “Credit continues to flow to households and businesses and is accessible to good quality borrowers. Although house price growth has eased, prices are still 40% higher than before the pandemic and household debt is high relative to incomes both compared with long-term trends and relative to international peers,” APRA chair John Lonsdale said.
“This high household debt is a key vulnerability if adverse economic scenarios came to pass. We also have seen an uptick in non-performing loans, with the potential for further rises, especially if unemployment increases and heightened geopolitical risks.”
The source: APRA media release
