Housing data to show why APRA stepped in

New figures will give some idea how Australia’s booming housing market was performing prior to the banking watchdog stepping in last month to tighten loan application rules.

The Australian Prudential Regulation Authority increased the minimum interest buffer it expects banks to use when assessing the serviceability of home loan applications.

It wants banks to assess applications at a rate three percentage points above the interest rate product being offered rather than 2.5 percentage points previously.

The CoreLogic home value index is released on Monday for October.

Prices were 1.5 per cent higher in September, a marked slowdown from earlier in the year. However the annual rate of more than 20 per cent was the fastest since mid-1989.

The Australian Bureau of Statistics will also release lending figures for September.

In August, mortgages to owner occupiers fell 6.6 per cent, while for investors they rose 1.5 per cent.

However, addressing senators last week, APRA chair Wayne Byres said one in five new loans that were approved in the June quarter were at more than six times the borrowers’ income.

“With lockdowns being lifted, and expectations that the economy will bounce back, APRA considered the balance of risks has shifted such that a timely adjustment to serviceability standards was warranted,” Mr Byres said.

The ANZ job advertisement series for October is also released on Monday – a pointer to future employment, -while the Australian Industry Group will issue its manufacturing index, also for October.