Housing prices and financial stability

An Australian perspective

Michele Bullock, David Orsmond

Research output: Chapter in Book/Report/Conference proceedingChapter

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Abstract

Strong growth of household indebtedness and housing prices has raised a range of financial stability concerns in Australia. While the main policy response has been to tighten lending standards, two quantitative portfolio benchmarks have also been used to help address the emerging macro-financial risks. These benchmarks have dampened activity in the types of loans targeted, though there are a number of questions around their use over the medium term. In particular, it is difficult to directly measure the effectiveness of these policies in addressing financial stability risks and hence to calibrate them accordingly. It is also important to consider whether there are undesirable consequences of such measures. More generally, the use of quantitative benchmarks to address financial stability risks is a relatively new policy approach in Australia and the practices are likely to evolve as more experience is gained.
Original languageEnglish
Title of host publicationHot property
Subtitle of host publicationthe housing market in major cities
EditorsRob Nijskens, Melanie Lohuis, Paul Hilbers, Willem Heeringa
Place of PublicationCham
PublisherSpringer, Springer Nature
Chapter17
Pages195-205
Number of pages11
ISBN (Electronic)9783030116743
ISBN (Print)9783030116736
DOIs
Publication statusPublished - 2019
Externally publishedYes

Bibliographical note

Copyright The Reserve Bank of Australia 2019. Version archived for private and non-commercial use with the permission of the author/s and according to publisher conditions. For further rights please contact the publisher.

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  • Cite this

    Bullock, M., & Orsmond, D. (2019). Housing prices and financial stability: An Australian perspective. In R. Nijskens, M. Lohuis, P. Hilbers, & W. Heeringa (Eds.), Hot property: the housing market in major cities (pp. 195-205). Cham: Springer, Springer Nature. https://doi.org/10.1007/978-3-030-11674-3_17