SYDNEY, Feb 24 (Reuters) - The head of Australia’s central bank said on Friday that supervision on the country’s biggest banks could be tightened further if lending to home investors keeps rising.
Skyrocketing home prices in Australia’s two largest cities, Sydney and Melbourne, have added to the case against further cuts in interest rates. The surge has been driven by an unwelcome revival in borrowing for investment properties.
Reserve Bank of Australia governor Philip Lowe said altering a tax break overwhelmingly favoured by wealthy property investors known as ‘negative gearing’ would help take some heat out of the housing market.
He was speaking before a parliamentary economics committee, answering questions on the economy and monetary policy. (Reporting by Swati Pandey; Editing by Richard Pullin)