Positive outlook for housing market: RBA
This month’s meeting of the Reserve Bank of Australia (RBA) board found building approvals for both higher-density and detached dwellings had increased.
There was generally a more positive outlook with regard to dwelling investment, according to minutes from the RBA meeting.
Following the board’s decision in May to reduce the cash rate target by 25 basis points, most lenders in Australia had subsequently lowered their standard variable housing rates in line with the reduction in the cash rate.
According to the board, this had “resulted in lending rates for most households and businesses reaching or approaching historic lows”.
There were also signs the appetite for borrowing in the household sector was picking up, and the housing market generally appeared to be improving, as the effects of the most recent and earlier reductions in the cash rate worked their way through the economy, the board heard.
Members observed that the effects of low interest rates had been evident in a range of housing market indicators.
In addition, loan approvals had grown more strongly in recent months, including for new housing, and auction clearance rates were well above average in Sydney and had picked up to be a bit above average in Melbourne.
The meeting was told while measures of dwelling prices had been relatively flat over recent months, they were still higher than the previous year.