Off the wire
• Singapore's derivatives market reopens  • Barcelona, Roma chase Brazil starlet - reports  • Man in court after drunkenly kidnapping Australian echidna  • New Zealand FM to mark four decades of ASEAN partnership  • Cambodia sees 35 pct drop in landmine casualties in 1st half of 2015  • Conservation areas not safe from climate change: Aussie scientists  • Mothers who smoke, drink, more likely to produce delinquent children: research  • Seoul shares open higher  • Market exchange rates in China -- Aug. 4  • China Hushen 300 index futures open higher Tuesday  
You are here: 　 Home

Sydney, Melbourne housing key risk to Australia's banking system: Moody's

Xinhua, August 4, 2015 Adjust font size:

Global credit rating agency Moody's on Tuesday said the Sydney and Melbourne housing markets are key risks facing Australia's banking system.

CoreLogic-RP released data on Monday showing house prices had increased 11.1 percent in the 12 months to July.

Sydney recorded its fastest pace in 13 years, increasing 18.4 percent.

Core-Logic said property investors made up more than 50 percent of all buyers in the market, with more than 60 percent in New South Wales alone.

"We see the strong appreciation in housing prices, particularly in Sydney and Melbourne, as a key and rising tail risk for the Australian banking system," Moody's vice president and senior credit officer Ilya Serov told Australian Business Spectator on Tuesday.

However the rating agency said it would maintain a stable outlook for Australia's banking system following recent regulations imposed on the country's lenders from the Australian Prudential Regulation Authority (APRA) to ensure lending standards remain prudent.

The decision by the APRA caused Australian banks to restrict property investor lending and hike interest rates on investor loans, in a move to hold the higher ratios of capital required for their loan books. Endi