HSBC’s Chief Economist (Australia & New Zealand) Paul Bloxham has written an interesting¬† article for The Property Observer that looks at the impact of APRA’s recent regulatory initiative in respect to lending practices in the investment space. Whilst the thrust of the regulation revolves around containment of much hyped ‘property bubbles’ within the Sydney & Melbourne markets in particular, the fallout extends to monetary policy decision making.

Put another way, this macro-prudential regulation may in of itself deliver quasi monetary outcomes that necessitate unwanted intervention by the RBA (read further reduction in the cash rate) as it seeks to balance the bigger picture in the face of fiscal drag and a stubborn currency.

You can read the full article here.