Australia’s investor led housing bubble could be worst that first thought.
The Reserve Bank deputy governor, Dr Philip Lowe, today revealed the central bank has been concerned about the banks significant upwards revision on investor mortgages.
Reviews over the past 6 months has found $50 billion in investor mortgages incorrectly classified as the banking regulator implements a 10 percent speed limit on growth of investor mortgages.
The ten percent increase revises upwards the portion of investor loans to 40 per cent, from the 35 per cent originally reported.
Dr Lowe said, “As lenders have looked more closely, what they have found has surprised and, to some extent, concerned us,”
The revelations today come as Barclays indicate Australia’s house prices are 22 per cent overvalued and will experience a “long period of broad stagnation.”
» Australian banks understated the value of investor loans by $50 billion: RBA – The ABC, 5th November 2015.
» RBA ‘surprised’ by banks’ $50b home loan error
» House prices set for long period of ‘stagnation’: Barclays – The Sydney Morning Herald, 5th November 2015.