APRA has ‘opened a can of worms’, says economist

APRA has ‘opened a can of worms’, says economist

by James Mitchell 1 comments

A leading economist has questioned the investor lending crackdown in light of the Reserve Bank’s recent shock over a $50 billion home loan error.

Domain Group senior economist Andrew Wilson said the regulatory crackdown on investor lending needs to be questioned if the integrity of the data it was based on is now being scrutinised.

“The RBA recently found $50 billion in unaccounted-for investor lending, which really does create a lot of head scratching,” he said.

“If we have to question the integrity of the data, really, doesn’t that question the whole nature of the policy as it has been introduced? We are not just looking at the outcomes of the macroprudential policy, but the nature of the recording of the particular data."

Dr Wilson’s comments come after the RBA expressed its concern over data problems that have emerged as lenders split investor loans from owner-occupied loans.

“It is a can of worms that has been opened. It’s not just questioning the need for a model in the first place, but it is now questioning the foundation of the model itself, and whether the outcomes are measurable in terms of rigour,” he said.

RBA deputy governor Philip Lowe said earlier this month that these data problems have emerged as lenders have taken a closer look at their housing loans following increased supervisory scrutiny.

“As lenders have looked more closely, what they have found has surprised and, to some extent, concerned us,” he said.

Next year APRA, the RBA and the Australian Bureau of Statistics will undertake a thorough review of the home loan data collected from Australian banks.

[LinkedIn: Has the investor crackdown affected your sales volumes?]

APRA has ‘opened a can of worms’, says economist
lawyersweekly logo
promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

With a combined sales volume of over $14 billion in 2017, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
Tim Heavyside on making every situation work, no matter the difficulty

Join Tim Neary as he chats with Fletchers Victoria director and auctioneer Tim Heavyside about the importance of getting the basics right, a...

View all podcasts

How much of an influence will bitcoin and other blockchain cryptocurrencies have on the home sale market in 2018?

None, Bit-what?
A little, cryptocurrency is a fad and will fade quickly
A lot, blockchain is the new black
Do you have an industry update?