The chief executive of a large mortgage franchise has taken aim at the Reserve Bank, saying that any regulatory action to curb property investment is “fruitless”.
In the minutes of the October monetary policy board meeting, the central bank noted that while continued accommodative monetary policy is expected to support growth, it is favouring the housing market – especially the investor market.
“To date, this had been most apparent in the housing market, where dwelling investment had picked up and was expected to remain strong following the rapid rise in housing prices and high levels of approvals. Credit growth had remained moderate overall, but in recent months there had been a further pick-up in lending to investors in housing,” the bank said.
Reluctant to raise the cash rate while the exchange rate remains high, the central bank then suggested reigning in the heated investor housing market through other means.
“Members noted that the current setting of monetary policy was accommodative, with lending rates remaining very low and continuing to edge lower over recent months as competition to lend had increased. In this context, members discussed the importance of lenders maintaining strong lending standards and the ongoing dialogue between the Bank and APRA on the matter,” the minutes stated.
However, News Ltd has reported that Michael Russell, chief executive of Mortgage Choice slammed the Reserve Bank at the mortgage broker's annual general meeting on Wednesday.
Russell argued that the government should be focussing on aiding housing supply instead of decreasing demand, especially at a time when Australians are being encouraged to invest and set themselves up financially for their retirement.
“I'm a bit perplexed as to why we would be singling these people out,” News Ltd quotes Russell. “It just seems quite fruitless to be curtailing demand.”
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