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Australia lags behind nations with strong mortgage regulation

The property market in Australia could be damaged by a lack of regulation over mortgage lending, which sees irresponsible loans given out to those who may struggle to pay them back.

It's an issue that saw the markets in the UK and US damaged in recent times, and according to the Sydney Morning Herald, while UK, New Zealand and Scandinavian central banks are addressing the problem now, it is not something that Australian regulators are dealing with. 

The average house purchase loan is four times household income in almost 80 per cent of the country, research by Digital Finance Analytics shows, and while this shows that risky loans are potentially increasing, the Reserve Bank has refused to intervene. 

Martin North, principal at researcher Digital Finance Analytics, told the Sydney Morning Herald: There's definitely room for caps on lending. Global house price indices are all showing Australia is close to the top, and the RBA has been too myopic in adjusting to what's been going on in the housing market."

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