The Reserve Bank of Australia is launching a review of the country’s lending sector, following the “concerning” discovery that banks have reported incorrect figures.
Australia’s housing has enjoyed controversial growth in recent years, with rising prices attributed by some to the impact of China’s thriving investment in the country’s real estate, leaving locals priced out of the market. In an attempt to cap growth in investment, the RBA recently raised rates for investor loans.
Now, though, the RBA has uncovered a concerning discrepancy in the figures reported by lenders, with banks revising their investor loan amounts and offsetting downward revisions to owner-occupier loans, resulting in an additional $50 billion worth of investor loans on their books.
Deputy Governor Philip Lowe said the RBA was “surprised and, to some extent, concerned” by the findings.
The revisions have been made by more than 10 institutions, including two of the country’s largest lenders. According to the new data, investor loans now account for 40 per cent of total housing loans outstanding, not the 35 per cent reported earlier in the year.
“While the reasons for some of these earlier errors have been identified, in other cases the reasons are unclear and lenders have not been able to provide comprehensive back data,” explained Lowe.
“These various data problems have reinforced our view that the supervisory focus on investor lending has been entirely appropriate. And it is disappointing that some lenders’ internal systems have not been up to the task of reporting accurate data on the split between investor and owner-occupied housing loans.”
Lowe noted that reliable data was vital to the RBA’s ability to make accurate and correct policy decisions in the managing of Australia’s property market.