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MNI BRIEF: RBA Sees Benefits From Home Prices, Risk In Retail

MNI (Sydney)
SYDNEY (MNI)

The booming Australian housing market has reduced near term risks to household balance sheets and more than halved the number of mortgage holders facing negative home equity to just 1.25% but the withdrawal of fiscal stimulus could slow income growth and challenge housing affordability for low income households, according to the Reserve Bank of Australia's quarterly Financial Stability Review released Friday.

The review also noted "elevated" risks in the Australian retail and office property sectors due to the impact of increased online retail sales and widespread remote working, and said insolvencies "are likely to rise."

Although the bank warned of the global risks from "exuberance and extrapolative expectations" with higher asset prices fuelling debt levels, it believes that Australia's strong lending standards, improving economy and well capitalised banks make its economy more resilient to any shock.

MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com
MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com

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