MELBOURNE (CU)_Over the past year, house prices in Australia have reported sharp increases, as ultra-low interest rates and billions of dollars in government stimulus pushed property prices to record highs. This has been the case in many developed economies, such as the United Kingdom, Canada and New Zealand, although unlike the monetary policy regulators of some of these countries, the Reserve Bank of Australia (RBA) has been holding off a hike in the official cash rate until economic conditions improved.
This decision by the apex bank was endorsed by the chief of one of the top banks in the country, who claimed that an increase in the OCR is not the way to tackle surging house prices. According to Ross McEwan, the CEO of the National Australia Bank (NAB), the most effective of tackling the matter is through another increase in the loan buffer for borrowers.
“We cannot see another 20 per cent house price growth over the next 12 months. We cannot afford to have that happen in the Australian marketplace,” he said on Tuesday (9 November), following the release of the bank’s full-year results.
Last month, the Australian Prudential Regulation Authority (APRA) increased…
