Australia's banking regulator has resisted calls to lower the serviceability buffer for new mortgages.
The likes of the Australian Banking Association, NAB, ANZ and some federal government and opposition MPs have called for thetest to be eased, saying it prevents first-home buyers from getting into the property market.
In making its decision, the regulator said there were still enough financial risks in the current economy to warrant the buffer. "That risk is exacerbated by uncertainty in the global economic environment including geopolitical instability... "This high household debt is a key vulnerability if adverse economic scenarios came to pass. We also have seen an uptick in non-performing loans, with the potential for further rises, especially if unemployment increases."
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