Comments from RBA head of financial stability Luci Ellis in here opening statement to the Australian parliament's House of Representative Standing Committee on Economics today
- "Recent history from around the world also shows that although households' mortgage borrowings typically do not instigate financial crises and distress, they can do so if the institutional arrangements and lending standards are configured to allow it.
- Australia is a long way from that situation and we want to ensure that remains true.
- More broadly, we want to promote financial stability by making sure that Australians are generally resilient to the financial shocks that might come their way"
If you are over watching paint dry and grass grow and are looking for something new and not very exciting to do ... the full text is here: Opening Statement to House of Representatives Standing Committee on Economics Inquiry into Home Ownership
More:
- The housing sector is one of the most interest rate sensitive parts of the economy. So a significant part of the transmission of the Board's monetary policy decisions to the real economy comes via housing markets.
- Housing market developments are also highly relevant to the Reserve Bank's mandate to promote financial stability.
- There is no disputing that housing is expensive
- Part of the reason for this is that demand is strong.
- From a financial stability point of view it is helpful that there has been no push to improve the position of first home buyers by easing lending standards
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There is a Q&A to come