The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
URBAN LEADER AWARDS ARE BACK! START YOUR NOMINATIONS
URBAN LEADER AWARDS ARE BACK! START YOUR NOMINATIONS
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
ResidentialStaff WriterMon 23 Oct 17

APRA Signals Lifting of Intervention After an 'Erosion' of Standards

26359181_m

APRA has signalled that it would like to start scaling back its lending intervention measures once lenders could demonstrate that they would be more responsible than in the past.

In a speech delivered this week at the Customer-Owned Banking Convention in Brisbane, APRA chairman Wayne Byres said that an “erosion in standards” amongst lenders tempted to trade off a level of prudence in exchange for market share had forced the regulator to act to “temper competition playing out through weak credit underwriting standards.”

APRA, concerned about soaring household debt and over-leveraging by borrowers, capped investor lending growth for major banks at 10 per cent per annum to limit interest-only loans to 30 per cent of new residential mortgages.

[Related reading: Housing Affordability Makes Slight Improvement Following APRA's Restrictions]The APRA chairman said that a prudent lender would have tightened lending standards in the face of higher risk in an environment faced of high house prices, high and rising household indebtedness, low interest rates, and subdued income growth.

[Related reading: Bank ‘Blacklists’: A Classic Case Of Cutting Off The Nose To Spite The Face]Byres said that APRA would need to be comfortable that the industry’s serviceability standards have sufficiently improved and crucially, would be sustained.

“We will also want to see that borrower debt-to-income levels are being appropriately constrained in anticipation of (eventually) rising interest rates.”

The chief executive of financial services group MyState, Melos Sulicich, has come out requesting government intervention as he believes that these measures from APRA has “disproportionately constrained smaller banks’ ability to grow”.

Sulicich said that instead of creating competition, this regulation has provided larger banks an advantage with their typically larger investor loan portfolios than smaller banks as rates on investor and interest-only loans increased.

Image copyright: tktktk / 123RF Stock Photo

ResidentialAustraliaFinancePolicyPolicy
AUTHOR
Staff Writer
"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
More articles by this author
ADVERTISEMENT
TOP STORIES
Exclusive

Robots Not a Miracle Cure for Housing Productivity Crisis

Vanessa Croll
6 Min
Exclusive

Where 600 Wealthy Families Are Putting Their Millions

Taryn Paris
6 Min
Brique Projects EDM
Exclusive

Brique Thrives in Cauldron of SE Queensland Development

Clare Burnett
7 Min
Henny Prime Henny Background
Exclusive

Why Henny and Prime Edition are Moving into Student Living

Leon Della Bosca
7 Min
Riverlee Seafarer's 1 Hotel HERO
Exclusive

Melbourne’s North Bank Awakens After Decades of Dormancy

Leon Della Bosca
8 Min
View All >
Exclusive

Robots Not a Miracle Cure for Housing Productivity Crisis

Vanessa Croll
Exclusive

The Urban Developer Awards for Industry Excellence Winners Revealed

Editorial Desk
Community

Urbanity Day One: Five Key Takeaways

Leon Della Bosca
Catch up with the big news from The Urban Developer’s annual flagship conference on the Gold Coast…
LATEST
Exclusive

Robots Not a Miracle Cure for Housing Productivity Crisis

Vanessa Croll
6 Min
Exclusive

The Urban Developer Awards for Industry Excellence Winners Revealed

Editorial Desk
14 Min
Community

Urbanity Day One: Five Key Takeaways

Leon Della Bosca
17 Min
Bates Smart Architects' rendering of the two towers for Lendlease, MEA and NSKRE's project at 175 Liverpool Street in Sydney.
Residential

Lendlease Signs Partners for Hyde Park Highrise

Marisa Wikramanayake
2 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/apra-wayne-byres-lending-standards