The country’s biggest banks face new restrictions on real estate lending as regulators pre-empt the risk that a sudden rise in interest rates or unemployment will collide with increasingly indebted families.
The Australian Prudential Regulation Authority said it would impose debt-to-income limits on both owner-occupier and investor mortgages for the first time to stop the build up of risky lending. The move would restrict lending to the most stretched borrowers to one-fifth of new loans.
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