Oz lenders advised to control home loans
Australian mortgage companies have been urged to preserve the strict standards on home loan finance deals in an effort to avoid a property bust of the kind experienced across the USA real estate industry.
In a speech given to the audience members of the Australian mortgage industry last week Luci Ellis, head of financial stability at The Reserve Bank, implored leaders of the financial industry to resist temptation to ease lending standards in the face of a slump in property sales. Using the US as an example of how things can go from bad to worse when lenders relax standards, however Ms Ellis was quick to confirm that she didn’t believe Australia was in a situation likely to create the fallout experienced across America.
Over the last twelve months average house prices in major cities have slipped by more than 3 per cent and the media house price currently stands at $450,000. Australian property is considered among the least affordable locations across the globe.