RBA holds rates at 2%
The Reserve Bank of Australia (RBA) has kept the official cash rate at 2%.
CoreLogic RP Data head of research Tim Lawless said August housing market data together with recent data on investor credit growth would have been welcome news to the Reserve Bank when they deliberated on the cash rate setting.
"The rate of capital gain eased across the housing market in August; after capital city dwelling values increased by more than two per cent in both June and July, it was reassuring to see that capital city dwelling values grew by a much more sustainable 0.3% in August," he said.
"Additionally, recent credit data released by the Reserve Bank showed the annual pace of growth in investment credit slipped from a recent annual high of 11.1% to reduce back to 10.8% in July. The slower month of housing data may indicate that the housing boom in Sydney and Melbourne is starting to slow and investment lending is starting to moderate in line with APRA guidelines.
"While the Sydney and Melbourne housing markets don’t need any further stimulus, other capital cities as well as regional markets have recorded much more sustainable growth rates. In fact dwelling values declined across four of the eight capital cities over the month of August and three capital cities, Perth, Darwin and Canberra, have recorded a decline in dwelling values over the past twelve months. Home owners and prospective buyers across Australia will welcome the sustained low interest rate setting which will continue to spur buyer demand and help to offset the effects of softer economic conditions outside of Sydney and Melbourne."
