On Wednesday, red-hot inflation data suggested Australia’s economy was rapidly approaching its speed limit. On Thursday, the nation’s banking regulator launched a pre-emptive strike aimed at ensuring the rapidly overheating housing market cannot do the same.
After weeks of speculation, the Australian Prudential Regulation Authority says it will apply macroprudential limits on higher-risk lending; from February, banks will be required to keep lending to borrowers who have debt of six times their income or more to 20 per cent of new loans across their owner-occupier and investor loan books.
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