of that assessment. yes, there was a tightening in lending standards from 2014 onwards. but through the first part of this, housing lending continued to grow at a fast pace. there was some further tightening over 2018 following the royal commission, mostly through stronger enforcement of existing policies. but the bulk of the tightening had preceded that. credit growth started to slow materially in mid 2017 ( graph 10 ). investor demand has slowed to such an extent that the stock of outstanding credit to investors has actually fallen in recent months. in my view this is primarily a decrease in investor demand given falling housing prices, more than the impact of tighter lending conditions. https : / / www. rba. gov. au / speeches / 2019 / sp - dg - 2019 - 10 - 17. html 13 / 17 10 / 17 / 2019 housing and the economy | speeches | rba graph 10 throughout, competition for high - quality borrowers with standard loan applications has remained strong. in the end, it is difficult to separate the effect of demand and supply, but this strong competition suggests there is more of a demand than a supply story. we are seeing a number of borrowers taking advantage of this competition by refinancing to lower rates. this, along with continued switching from interest only to principal and interest loans, amounts to a reduction in variable mortgage rates paid of around a basis point per month. there is still plenty of scope for more of this to occur, given that the interest rate on a new loan is some 30 basis points below the average outstanding rate for owner - occupiers. this brings me to the question of what will happen now that mortgage rates have declined. following the recent 75 basis point reduction in the cash rate, on average, variable mortgage rates have declined by around 60 basis points. interest rates are historically low. will we see a material increase in borrowing as a result? while turnover in the housing market remains low, credit growth is likely to remain low, even as prices pick up. households may be more conservative in their willingness to borrow given low income growth. lenders are applying tighter standards than in the past. both of these may well combine to result in a more muted pick - up in lending than in the past. https : / / www. rba. gov. au / speeches / 2019 / sp - dg - 2019 - 10 - 17. html 14 / 17 10 / 17 / 2019 housing and the economy | speeches | rba loan approvals

philip lowe : opening statement - house of representatives standing committee on economics opening statement by mr philip lowe, governor of the reserve bank of australia, to the house of representatives standing committee on economics, canberra, 17 february 2023. * * * good morning chair and members of the committee. thank you for holding this hearing. last week, the reserve bank board increased interest rates by a further 25 basis points. this brings the cumulative increase in interest rates since may last year to 3¼ percentage points, with the cash rate target currently standing at 3. 35 per cent. i would like to begin today by discussing why the increase in interest rates has been necessary and the outlook for the next couple of years. high inflation and interest rates at its core, the rise in interest rates has been required to make sure that the current period of high inflation is only temporary. this is our job as australia's central bank. in the december quarter, the inflation rate reached 7. 8 per cent. this is the highest rate since 1990. the inflationary pressures were broadly based, with the prices of almost three - quarters of the items in the cpi basket increasing by more than 4 per cent last year. in underlying terms, the inflation rate reached 6. 9 per cent in the december quarter. again, this is the highest rate in a number of decades and it is higher than we were expecting just a few months ago. high inflation is damaging and corrosive. it hurts people, puts pressure on household budgets and erodes the value of people's savings. it increases inequality and hurts people on low incomes the most. high inflation also damages longer - term economic performance, making the environment uncertain for planning and investing. and if inflation does become ingrained in people's expectations, bringing it back down again is very costly. history teaches us that once inflation becomes ingrained the end result is even higher interest rates and even greater unemployment to bring inflation back down. it would be dangerous, indeed, not to contain and reverse this period of high inflation. this episode of high inflation has its origins mainly in developments on the supply side but, over time, demand - side factors have become more prominent. it emerged in the wake of the covid supply chain disruptions and russia's invasion of ukraine, and also strong domestic demand due to the bounce - back from covid and the large policy stimulus during the pandemic. 1 / 5 bis - central bankers'speeches most advanced economies are in a similar