In the RBA Monetary Policy Statement, Mr.Lowe said; “The broad-based pick-up in the global economy is continuing. Labour markets have tightened further in many countries and forecasts for global growth have been revised up since last year. Above-trend growth is expected in a number of advanced economies, although uncertainties remain.”
“Conditions in the housing market vary considerably around the country,” he said. “Housing prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease.”
“In some other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades. Growth in housing debt has outpaced the slow growth in household incomes.”
“The recent supervisory measures should help address the risks associated with high and rising levels of household indebtedness. Lenders have also announced increases in mortgage rates for investor and interest-only loans.”
“Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
Our policymakers are keeping a close eye on the property market and don’t want to push the already over-heated residential property sector and re-ignite the housing boom. Experts claim that the current holding pattern will continue, despite a weak growth and inflation outlook, until the housing market is clearly in retreat.