Financial regulators are keeping a watchful eye on Australia’s booming housing market

Financial regulators are keeping an eye on Australia’s booming housing market, but at this stage they are comfortable that lending standards have not been relaxed.

New lending figures for April are released on Friday, which potentially will see a further rise in new housing loans after increasing 5.5 per cent to a record high in March, to be a huge 55.3 per cent higher than a year earlier.

The strength in lending has gone hand-in-hand with rising house prices, which nationally stand over 10 per cent higher than a year earlier.

Lending has largely been secured by owner-occupiers, and particularly first home buyers.

However, in Senate hearings this week officials from both the Reserve Bank and the banking watchdog, the Australian Prudential Regulation Authority, made a point of noting the return of investors in recent months.

Investor home lending jumped 12.7 per cent in March, the largest monthly rise since July 2003.

APRA chairman Wayne Byres reminded senators that the last time the regulator intervened in the market to curb what are seen as riskier loans to investors in 2017, interest-only loans were running at 40 per cent of all loans being granted.

But that was quickly halved as lending criteria were tightened.

However, he said there is no intention of intervening at the moment, insisting he does not have a threshold where he would step in.

RBA assistant governor Michelle Bullock was also comfortable that lending standards had not been relaxed.

The central bank has repeatedly said it won’t be raising interest rates to cool a heated housing market.

It is sticking to its line that the cash rate won’t be increased from its current record low of 0.1 per cent until 2024 at the earliest.