The Property Council of Australia said it understands the rationale for the Australian Prudential Regulation Authority's decision to increase interest buffers on home loan applications and believes that the impacts should be monitored into the new year before any further action is considered.
"We understand the prudent rationale for APRA's decision to adjust these home loan eligibility tests. We note it will be vital for the Government and the regulator to monitor the situation closely into 2022, to ensure their efforts do not sap broader market confidence during our economic recovery," said Property Council Chief Executive Ken Morrison.
"Australia's residential housing market is worth almost $10 trillion and housing represents the bedrock asset of many Australian families. This move comes when fiscal stimulus and the HomeBuilder effect are withdrawing from the economy, the successful transition out of lockdown of our two largest states has yet to occur, and net overseas migration is still negative.
"Strong housing construction has underpinned Australia's economic resilience through the pandemic and supports more jobs per dollar spent than any other industry and this should never be taken for granted.
"We urge the Government and the regulator to keep a patient focus on the impacts of these changes until the new year and to target their communications accordingly."
