Impact of the regulatory regime on promoting the housing finance market in Australia

Abstract

The purpose of this article is to analyse how Australia's regulatory framework for housing finance mitigates various risks in mortgage lending and promotes positive market outcomes and system stability. The article first considers the main bodies involved in the regulation of residential mortgages, their roles and the type of regulations enforced by each regulator in relation to housing finance in Australia. The key regulators identified in this article include the Reserve Bank of Australia, the Australian Prudential Regulation Authority, the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission. This part focuses on the post-financial crisis regulatory changes in housing finance, including revisions to existing regulations and introduction of new regulations. The article then discusses the implications of regulation for mortgage markets and players, practices and conduct. This section reviews mortgage lending practices in Australia that can be viewed as either particularly prudent or particularly risky. Finally, the article analyses the impact of regulation on promoting positive market outcomes, including housing finance system stability in Australia.