An article on Business Spectator (Aussie website), it says:
- The RBA is perhaps closer to intervening in the housing market than many expect
- It has considered a range of macroprudential policies designed to limit the systemic risk arising from the Australian housing market (Earlier post here: RBA macro-prudential discussion papers released under FOI act)
- RBA head of financial stability, Luci Ellis, believes that ‘the most promising policy response seems to be to introduce a regulatory regime that automatically requires larger interest buffers in loan affordability calculations when interest rates are low’.
more here (ungated):The RBA’s radical remedy for soaring house prices
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The RBA are considering alternatives to interest rate hikes (if, and when, the time comes):
as the RBA tries to balance a soft business sector with strong house price growth. Macroprudential policies would allow the RBA to continue to promote low rates to support the business sector without needing to worry about whether they will create a house price bubble. That is the type of policy flexibility that I’m sure the RBA would love right now
