APRA Tightens Home Loan Borrowing
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APRA Tightens Home Loan Borrowing

The move is said to counter rising risks in home lending.

By Terry Christodoulou
Wed, Oct 6, 2021 10:09amGrey Clock < 1 min

The Australian Prudential Regulation Authority (APRA) has today increased the minimum interest rate buffer it expects banks to use when assessing the serviceability of home loan applications.

The prudential regulator says the move will reduce the maximum borrowing capacity for the typical borrower by around 5%.

APRA has written to banks telling them to increase the buffer by 0.5% from 2.5% to 3%.

The buffer is added to the interest rate of the loan and borrowers are assessed on whether they can repay with the buffer to guard against higher interest rates in the future.

APRA Chair Wayne Byres said this is a targeted and judicious action.

“In taking action, APRA is focused on ensuring the financial system remains safe, and that banks are lending to borrowers who can afford the level of debt they are taking on – both today and into the future,” said Mr Byres.

It comes as housing credit growth is increasingly being driven by lending to more marginal and highly indebted borrowers. In the June quarter of 2021 more than 20% of new lending was to borrowers that had loaned more than 6 times their pre-tax income – a figure that is high by historical and international standards.

“With the economy expected to bounce back as lockdowns begin to be lifted around the country, the balance of risks is such that stronger serviceability standards are warranted,” Mr Byres said.

APRA decided to not use an interest rate floor as it said moving the floor would have a larger impact on owner-occupiers. The regulator had previously used a set floor until 2019 when it handed responsibility back to banks.



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Wild cities and concrete corridors: How AI is reimagining the landscape

A new AI-driven account by leading landscape architect Jon Hazelwood pushes the boundaries on the role of ‘complex nature’ in the future of our cities

By Robyn Willis
Wed, Dec 6, 2023 2 min

Drifts of ground cover plants and wildflowers along the steps of the Sydney Opera House, traffic obscured by meadow-like planting and kangaroos pausing on city streets.

This is the way our cities could be, as imagined by landscape architect Jon Hazelwood, principal at multi-disciplinary architectural firm Hassell. He has been exploring the possibilities of rewilding urban spaces using AI for his Instagram account, Naturopolis_ai with visually arresting outcomes.

“It took me a few weeks to get interesting results,” he said. “I really like the ephemeral nature of the images — you will never see it again and none of those plants are real. 

“The AI engine makes an approximation of a grevillea.”

Hazelwood chose some of the most iconic locations in Australia, including the Sydney Opera House and the Harbour Bridge, as well as international cities such as Paris and London, to demonstrate the impact of untamed green spaces on streetscapes, plazas and public space.

He said he hopes to provoke a conversation about the artificial separation between our cities and the broader environment, exploring ways to break down the barriers and promote biodiversity.

“A lot of the planning (for public spaces) is very limited,” Hazelwood said. “There are 110,000 species of plants in Australia and we probably use about 12 in our (public) planting schemes. 

“Often it’s for practical reasons because they’re tough and drought tolerant — but it’s not the whole story.”

Hazelwood pointed to the work of UK landscape architect Prof Nigel Dunnett, who has championed wild garden design in urban spaces. He has drawn interest in recent years for his work transforming the brutalist apartment block at the Barbican in London into a meadow-like environment with diverse plantings of grasses and perennials.

Hazelwood said it is this kind of ‘complex nature’ that is required for cities to thrive into the future, but it can be hard to convince planners and developers of the benefits.

“We have been doing a lot of work on how we get complex nature because complexity of species drives biodiversity,” he said. 

“But when we try to propose the space the questions are: how are we going to maintain it? Where is the lawn?

“A lot of our work is demonstrating you can get those things and still provide a complex environment.” 

At the moment, Hassell together with the University of Melbourne is trialling options at the Hills Showground Metro Station in Sydney, where the remaining ground level planting has been replaced with more than 100 different species of plants and flowers to encourage diversity without the need for regular maintenance. But more needs to be done, Hazelwood said.

“It needs bottom-up change,” he said. ““There is work being done at government level around nature positive cities, but equally there needs to be changes in the range of plants that nurseries grow, and in the way our city landscapes are maintained and managed.”

And there’s no AI option for that. 

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