Market support: A woman walks past a real estate agent’s window advertising houses for sale and auction in Melbourne. The country’s relaxed lending standards, coupled with a likely RBA rate cut, is expected to provide support to the country’s A$1.9 trillion housing market, which has slowed significantly. — AFP
SYDNEY: Australia’s prudential regulator said it plans to relax some of the norms banks use to determine how much they can lend to customers, sending stocks in the sector higher on expectations the move would boost borrowing.
The change would remove the minimum 7% interest rate banks are currently required to use in their stress tests of customers’ loan applications and instead propose a 2.5% buffer above the bank’s loan rate to assess serviceability.
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