SYDNEY, Nov 15 (Reuters) - Australia's economy is less vulnerable to shocks thanks to regulators' efforts in recent years to curb riskier home lending with macro prudential measures, a top central banker said on Thursday.
Speaking in Sydney, Reserve Bank of Australia (RBA) Deputy Governor Guy Debelle also played down fears restrictions on lending had led to a decline in the supply of credit and exacerbated a pullback on house prices.
"The available evidence suggests that the policies have meaningfully reduced vulnerabilities associated with riskier household lending and so increased the resilience of the economy to future shocks," said Debelle.
Regulators had been concerned that explosive growth in lending for home investment, and particularly for interest-only loans, would leave households vulnerable should the economy take a turn for the worse.
Successive rounds of tighter lending standards have seen investment lending slow sharply while the stock of interest-only loans now comprise just 27 percent of outstanding debt, compared to a peak around 40 percent.
However, Debelle did caution that banks' tightening of lending standards on property developers could curb construction over time.
"There is a risk that this process overshoots leading to a sharper or more protracted decline in activity than we currently expect."