SYDNEY, March 14 A top Australian central banker
said on Tuesday said the calming effect of tighter rules on
housing lending might be fading and regulators stood ready to
impose more restrictions if necessary to head off risks in the
Reserve Bank of Australia (RBA) Assistant Governor Michele
Bullock was referring to stricter rules on lending imposed by
the Australian Prudential Regulation Authority over the past
couple of years when rapid lending for home investment was
pushing up prices.
"The regulators judged that more targeted action was needed
to address the risks – to put a bit of sand in the gears," said
Bullock, who heads the central bank's financial division.
"There is no doubt that the actions did address some of the
risks," she added. Home prices did cool in the first half of
last year while lending for investment slowed sharply.
However, in recent months lending has accelerated again
while home prices in Sydney and Melbourne have climbed to new
"The early experience suggests that, while the resilience of
both borrowers and lenders has no doubt improved, the initial
effects on credit and some other indicators we use to assess
risk may fade over time," Bullock said.
"We are continuing to monitor their ongoing effects and are
prepared to do more if needed."
The danger of a debt-fuelled bubble in housing is a major
reason the central bank has resisted pressure to further cut
interest rates, already at record lows of 1.5 percent.
(Reporting by Wayne Cole; Editing by Alison Williams)