New data suggests changes to mortgage lending rules in the near future are unlikely, despite rapidly-rising home values.

APRA data suggests that while the proportion of loans considered to be ‘higher risk’ showed a slight increase in the December Quarter, the regulator saw no evidence of a “material relaxation in lending standards”.

CoreLogic’s Eliza Owen says indicators of lending standards are being watched carefully. Borrowing for the purchase of residential property hit a record $28.8 billion in January, up 35% on the decade average. “This has also contributed to housing values reaching a new record high,” she says.

Owen says there is no evidence of any major deterioration in lending standards, suggesting there is no need for interventions in the form of tighter credit policies.

The portion of new mortgages lent on interest-only terms hit 19.2% in the December 2020 Quarter, up from 18.5% in the previous quarter. This is not far from the 18.7% average seen over the past two years – and it is also is well below the record high of 45.6%, recorded in the June 2015 Quarter.