Residential mortgage lending continues to underpin the balance sheet expansion and profitability of authorised deposit‑taking institutions (ADIs) in Australia. While private equity has attracted much of the media attention recently, the fact remains that over the first three quarters of 2006/07 owner‑occupied and investment housing lending added a further $45 billion to ADI assets. In an economy of enduring strength, housing lending has generally been very good business to date. In writing it, nonetheless, ADIs have been willing to move out the risk spectrum by loosening their credit standards, around the edges certainly.

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