The Property Council of Australia has welcomed APRA's announcement of a review of its residential mortgage lending guidance, including the possible removal of the 7 per cent minimum interest rate floor.
"This is a welcome and timely move by APRA which recognises the changed circumstances in the current interest rate environment for lenders and the residential housing market," said Ken Morrison, Chief Executive of the Property Council of Australia.
"It makes sense to revisit some of the measures originally put in place at the peak of the housing market. Different markets need different settings.
"A stable and well-regulated financial system is fundamental to our economic prosperity and it is appropriate that the guidelines for lending standards are regularly reviewed.
"As APRA notes, this is not about easing sound lending standards but recognition that the interest rate environment has changed with interest rates now at a record lows, and likely to remain so, the gap between the 7 per cent floor and actual rates has become quite wide."
The Property Council will make a submission to the review, emphasising the importance of access to finance in supporting jobs, investment and growth in the Australian housing market.
