Home loan

Home loan crackdown appears imminent

PHOTO: Regulators are becoming increasingly concerned by rising house prices and the growing debt fuelling the boom.(ABC News)

The Treasurer has given the strongest indication yet that a home loan crackdown is looming, confirming that surging house prices were a key topic of discussion at a regulators’ meeting on Friday.

The typical Australian home has seen its value climb more than 18 per cent over the past year, with some cities and many regional areas seeing even larger price jumps.

Fuelling the rise in prices has been an increase in debt, as record-low interest rates have made larger loans more affordable.

The total value of monthly home loan approvals, excluding the refinancing of existing loans, jumped by more than two-thirds over the past year.

Now the architects of the latest housing boom — the Reserve Bank, through record-low interest rates; the banking regulator APRA, through looser lending standards; and the federal government, through its HomeBuilder stimulus scheme — have met to discuss what to do about it.

“Last Friday, I joined the Council of Financial Regulators to discuss a range of issues including the state of the housing market which is a particular focus for both APRA and the RBA,” Treasurer Josh Frydenberg told the ABC in a statement.

“Carefully targeted and timely adjustments are sometimes necessary. There are a range of tools available to APRA to deliver this outcome.”