Mortgage lending standards improving, Byres says
Close scrutiny by the Australian Prudential Regulation Authority of banks' mortgage lending practices is bearing fruit, APRA chair Wayne Byres told the Senate's Economics Legislation Committee yesterday."Serviceability assessment standards have improved across the industry," he said."Lenders that were previously the least conservative have shown the greatest improvement, and some of the most aggressive lending practices that we observed have been eliminated."Byres said APRA's "efforts have also likely played a role in the slow-down in the growth of investor lending. "Looking through the noise in the data due to reclassifications, investor lending grew by around 8.5 per cent over 2015," he said.
Byres noted that "while this has moderated over recent months, lending to owner-occupiers has accelerated, such that the growth in the total volume of housing finance was slightly higher over the past year compared with the previous one."He hinted at further initiatives to rein in any lenders straining to break away from guidelines introduced in late 2014."We are continuing to work to address to our satisfaction any lingering issues within individual lenders," Byres said."We are also turning our mind to how we might entrench recent improvements and lessen the level of supervisory resources we devote to this topic in the future."