Reserve Bank's caution on house prices is aimed at both banks and borrowers

Glenn Stevens has been stepping up warnings to the banks not to loosen lending criteria and to investors to 'take care with the amount of leverage' they take on

Housing prices are once again on the radar. Last week the Reserve Bank issued its six monthly financial stability review and the governor of the RBA, Glenn Stevens gave a speech in which he covered aspects of the housing market. This coincided with a number of reports in the media which noted that Australian housing prices have in the past six years zoomed well beyond that experienced in other countries, and that housing affordability is at record lows.

As ever the worry with housing prices really isnt much about affordability. Sure the word gets thrown around as though its something to care about, but for the most part the concern is that housing will quickly get more affordable because that will mean prices have fallen quickly.

via Business Feeds

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