Vital Signs: to fix Australia s housing affordability crisis, negative gearing must go unsw.edu.au - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from unsw.edu.au Daily Mail and Mail on Sunday newspapers.
NZ rules could wipe 20pc off home values: Goldman Sachs
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New Zealand’s fresh restrictions on property investment could cut house price growth by up to 20 per cent and slice up to 1 percentage point from gross domestic product over the medium term, analysis from Goldman Sachs suggests.
The investment bank is not yet predicting what such restrictions would do to the heated Australian market if they were imposed but chief economist Andrew Boak expects they will not be introduced given their unpopularity at the last federal election.
Such reluctance would allow Australia’s housing market to continue its upward trajectory in price growth – the fastest in 32 years.
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APRA releases consultation to enhance oversight of life reinsurance market
The Australian Prudential Regulation Authority (APRA) has released for consultation a package designed to address concerns regarding the increased use of offshore reinsurers by life insurers. These concerns are particularly heightened in relation to the group risk market, which plays an important role in Australia’s superannuation system.
The proposed updates to Prudential Standard LPS 117 Capital Adequacy: Asset Concentration Risk Charge (LPS 117) will impose an aggregate limit on the exposure of life insurers to offshore reinsurers, which are not regulated by APRA. Offshore reinsurers that enter the domestic market and become an APRA-registered entity will not be subject to the aggregate limit.
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at 11:20 am on April 8, 2021 | 27 comments
Domain continues its laudable series bashing the RBA today. It has good sources, especially our favourite, Gareth Aird at CBA, but, alas, I have to disagree with its conclusion that Australia has delivered its last “kick of the can” to house prices:
The RBA does care about house prices (mostly true).
Financial liberalisation is the key driver of the boom.
Gareth Aird says at zero rates the game is over.
The game might be over but it will be a political decision if so, not economic nor monetary.
There is nothing to stop the RBA from lowering Australian mortgage rates further. There will be prices to pay for it doing so. But it is quite possible.
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Australia’s insurance regulator on Thursday proposed to limit the exposure of life insurers to offshore reinsurers, given its lack of oversight of foreign players.
The Australian Prudential Regulation Authority (APRA) said it was starting a consultation period that would end on June 25, to set a standard by the end of the year.
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“The recent growth in life insurers placing business with offshore reinsurers has been a prudential concern, as APRA does not have regulatory authority over these reinsurers,” the regulator’s Deputy Chair Helen Rowell said. (https://bit.ly/3rZK41M)