APRA must act on investor lending

Unless APRA takes an aggressive approach to investor lending, there is a real risk that rate cuts will drive property prices higher while undermining the business sector.

Property investors continue to drive credit growth across the country. Lending otherwise remains quite muted -- although there has been a modest pick-up in business credit -- reflecting the high existing stock of credit and the subdued outlook for the Australian economy.

Housing credit rose by 0.6 per cent in December to be 7.1 per cent higher over the year. Growth continues to be concentrated among investors, with credit outstanding to this segment rising by 10.1 per cent over the year to December.

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