SYDNEY Dec 3 The International Monetary Fund
has warned Australia may need to tighten rules on home loan
lending and ensure banks have more capital to strengthen
resilience against economic shocks, The Australian Financial
review reported on Saturday.
IMF Deputy Managing Director Tao Zhang told the paper
Australia's housing-market vulnerabilities and its dependence on
trade made it susceptible to global risk, including
protectionist policies touted by U.S. President-elect Donald
"We're talking about prudential policies needing to be
intensified, with targeted macroprudential measures and banks
being encouraged to robustly increase their capital position,"
Concerns that parts of the Australian housing market are
oversupplied, particularly in the apartment sector, have
recently made some banks more cautious about lending to
developers and buyers.
Approvals for new Australian homes had a shock tumble of
12.6 percent in October from a month earlier, confounding
forecasts of a 1.5 percent rise and marking the biggest drop
Zhang said high house prices and accompanying household debt
could amplify economic shocks, including shocks from overseas.
(Reporting by Harry Pearl; Editing by Sandra Maler)