2019.10.0400:17:00UTC+00RBA Says Housing Market Key Source Of Potential Systemic Risk

The Reserve Bank of Australia said the housing market is a key source of potential systemic risk, which needs to be monitored.

In the Financial Stability Review, released on Friday, the central bank said risks related to the housing market have receded somewhat as housing market conditions in Sydney and Melbourne have improved.

In contrast to Sydney and Melbourne, housing prices in Western Australia and the Northern Territory have continued their prolonged decline. Overall, housing markets did not experience the earlier price declines seen in Sydney and Melbourne, and prices are generally close to their 2018 peaks, the bank observed.

Lower interest rates and relaxation of lending rules helped to stabilize the housing market conditions, the bank said.

Further, the RBA noted that the resilience of the Australian financial system has steadily improved as a result of actions taken in response to the lessons learned from the financial crisis.