RBA sees cooling housing market
The Reserve Bank is comfortable that the housing market has cooled, as their August meeting minutes reveal.
The Reserve Bank board chose to cut the official cash rate to 1.50% at its August meeting, and minutes from the meeting indicate the decision was supported by a cooling housing market.
“Members noted that most indicators pointed to an easing in conditions since late 2015. Recent data indicated that housing prices appeared to have grown modestly in the June quarter and had declined a little in most capital cities in July,” the Reserve Bank minutes said.
The RBA noted that CoreLogic data showed strong increases in capital city house prices in April and May. But the board said this was offset by data from other sources.
“Data from other sources indicated that housing price growth had instead remained moderate in the June quarter,” the RBA said.
The Reserve Bank also noted that, while auction clearance rates had risen in Sydney and Melbourne, the number of auctions had fallen and the average days properties remained on market had increased.
Overall, the RBA board indicated it was comfortable the housing market was moderating.
“Housing credit growth had been little changed in recent months and remained below that of a year earlier. Rent inflation had declined to its lowest level since the mid 1990s and the rental vacancy rate had drifted higher to be close to its long-run average,” it said.