RBA's Stevens Says Moderation In House Prices Was Helpful
Reserve Bank of Australia governor Glenn Stevens said the moderation in house prices in some locations due to tight lending standards was helpful.
"Some moderation in house prices in some of the locations where they had been rising most rapidly, while not the direct objective of the supervisory measures, is also, in my judgement, helpful," Stevens said in Sydney on Tuesday.
So often tighter standards tended to come too late and reinforced a downturn after it had begun, he noted. These measures have occurred ahead of the point in the cycle when measures of asset quality start to deteriorate, Stevens added.
The local economy has been improving and the financial system overall gaining in resilience, albeit with a few pockets to watch, he said. "Given that and a reasonable track record of adapting to shocks, we have some ground for confidence in our capacity to negotiate whatever lies ahead."
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