Invest
Creeping house price rises a non-issue for central bank
The governor of the Reserve Bank of Australia (RBA) has hinted at further cash rate cuts despite holding a belief that the economy has reached a slow turning point thanks to house price rises.
Creeping house price rises a non-issue for central bank
The governor of the Reserve Bank of Australia (RBA) has hinted at further cash rate cuts despite holding a belief that the economy has reached a slow turning point thanks to house price rises.
Dr Philip Lowe made the statements in a speech at the Armidale Business Chamber, dismissing concerns that housing prices are becoming an issue even if current growth projections meant they would reach a new record high in one and a half years.
Acknowledging it as true that prices have risen for a few months in a row now, he argued that people “have to remember for 18 months in a row houses fell in Sydney and Melbourne and they came down 15 per cent and they have just come up a couple per cent”.
“So, I am not particularly concerned about that,” Dr Lowe said, despite expecting prices will continue to rise.
“It seems quite possible that we could have a period now of rising housing prices because construction is slowing and population is still rising quite quickly.”
He noted that underlying drivers of housing prices are rearing their heads.
At the same time, the governor conceded that many households are “a bit reluctant to borrow, which is not surprising when their incomes aren’t growing strongly and banks are still reluctant to lend”.
But, from his position, Dr Lowe doesn’t see any of the above as cause for concern.
“From a monetary policy perspective, it’s not an issue at the moment, but it would become an issue if credit growth accelerated rapidly,” he said.
“But I see no signs of that at the moment.”
Instead, the governor hinted at further relief for mortgage holders, although he did note that banks might not pass on any further interest rate cuts in full.
“The market is forecasting cuts and further easing of monetary policy over the next year, and I think that is a reasonable expectation,” Dr Lowe concluded.
About the author
About the author
Property
Are we nearing another property boom?
There’s a secret to knowing when the property cycle will take its next turn, and it's not as far away as some may think, according to a property expert. ...Read more
Property
Hot Property: Biggest headlines this week
Based off anecdotal accounts, the property industry is gearing up for a strong spring season: Here are the biggest property stories from this week. ...Read more
Property
Ace a rental application in 5 simple steps
In many areas across Australia, the rental market is becoming increasingly competitive, so how do you ensure your application will stand out? ...Read more
Property
Population falls could see Australia with 232,000 vacant dwellings
The shutdown of international borders could cut demand for Australian housing by as much as 232,000 dwellings over the next three years, according to research. ...Read more
Property
How will border closures impact the property market?
Despite falling migration levels, property prices might not be impacted as much as investors think, an industry expert has explained. ...Read more
Property
Sydney, Brisbane, Melbourne tipped to surge: Westpac
One of Australia’s largest banks is forecasting strong growth in the housing market as low interest rates and availability of credit pushes prices up, despite the country being in its first recessio...Read more
Property
Is now the right time to make a tree or sea change?
The experience of isolating in our homes and suburbs has made many people reconsider what they actually value in a home, writes David Hancock. ...Read more
Property
Hot Property: Biggest headlines this week
Victoria’s COVID-19 restrictions have begun to lift as the rest of the country watches on: Here are the biggest property stories from this week. ...Read more
Property
Are we nearing another property boom?
There’s a secret to knowing when the property cycle will take its next turn, and it's not as far away as some may think, according to a property expert. ...Read more
Property
Hot Property: Biggest headlines this week
Based off anecdotal accounts, the property industry is gearing up for a strong spring season: Here are the biggest property stories from this week. ...Read more
Property
Ace a rental application in 5 simple steps
In many areas across Australia, the rental market is becoming increasingly competitive, so how do you ensure your application will stand out? ...Read more
Property
Population falls could see Australia with 232,000 vacant dwellings
The shutdown of international borders could cut demand for Australian housing by as much as 232,000 dwellings over the next three years, according to research. ...Read more
Property
How will border closures impact the property market?
Despite falling migration levels, property prices might not be impacted as much as investors think, an industry expert has explained. ...Read more
Property
Sydney, Brisbane, Melbourne tipped to surge: Westpac
One of Australia’s largest banks is forecasting strong growth in the housing market as low interest rates and availability of credit pushes prices up, despite the country being in its first recessio...Read more
Property
Is now the right time to make a tree or sea change?
The experience of isolating in our homes and suburbs has made many people reconsider what they actually value in a home, writes David Hancock. ...Read more
Property
Hot Property: Biggest headlines this week
Victoria’s COVID-19 restrictions have begun to lift as the rest of the country watches on: Here are the biggest property stories from this week. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
