The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
FULL PROGRAM RELEASED FOR URBANITY-25 CONNECTING PROPERTY LEADERS ACROSS THE ASIA PACIFIC
FULL PROGRAM RELEASED FOR URBANITY-25 WHERE THE PROPERTY INDUSTRY CONNECTS
VIEW FULL AGENDADETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
1
print
Print
OtherRenee McKeownTue 04 Feb 20

House Price Rebound Gives the Reserve Bank Pause

eedf27b5-14fd-4ada-aab6-b5eb7cb10d8d

The Reserve Bank has decided to hold the cash rate steady at 0.75 per cent despite growing expectations of further rate cuts over coming months.

The rate remained unchanged from the record low in October 2019, which was largely anticipated by market analysts.

RBA governor Philip Lowe said the global economic outlook remained reasonable.

“There have been signs that the slowdown in global growth that started in 2018 is coming to an end,” he said.

“Global growth is expected to be a little stronger this year and next than it was last year and inflation remains low almost everywhere.”

The RBA also expected recovery in residential construction after continued signs of a pick-up in established housing markets.

“This is especially so in Sydney and Melbourne, but prices in some other markets have also increased,” Lowe said.

“Mortgage loan commitments have also picked up, although demand for credit by investors remains subdued.

“Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.

“Credit conditions for small and medium-sized businesses remain tight.”

CBA senior economist Belinda Allen said there appeared to be little if any change to key RBA projections for the next couple of years.

“The main risks with the Australian outlook lie with the consumer and the lack of wages growth,” she said.

“On the flip side, the RBA is more optimistic about an improving residential construction outlook later in the year.”

Capital Economics economist Ben Udy said that persistent weakness in the underlying economy will force the bank to 0.5 per cent in April.

“Given our weaker GDP forecast, we think inflation will fall further below the Bank’s target this year forcing the RBA to cut rates before long,” he said .

“We forecast the Bank to cut interest rates twice this year with the first of those cuts taking place in April.”

Corelogic head of research Tim Lawless added further rate cuts could fuel home buyer demand, although they don’t expect future cuts to the cash rate to be passed on in full to mortgage rates.

“To date, lower interest rates haven’t flowed through to a material improvement in economic conditions,” he said.

“Housing markets have well and truly responded, with national housing values rising 6.7 per cent since the first rate cut in June through to the end of January.

“Importantly we may be seeing some early signs that strength in housing markets is transferring through to other sectors.

“With dwelling approvals recording their first annual rise since mid-2018 and the value of new mortgage commitments up 5.9 per cent over the year to November, driven by a 10 per cent increase in owner-occupier commitments.”

OtherResidentialAustraliaConstructionFinanceConstructionOther
AUTHOR
Renee McKeown
More articles by this author
ADVERTISEMENT
TOP STORIES
Nation's build-to-rent project Charlie Parker in Sydney's Parramatta where more projects are being located and built outside the CBD.
Exclusive

Foreign Capital Still Dominates BtR but Things are Changing

Marisa Wikramanayake
7 Min
Exclusive

Fortis Reveals Plans for Coveted Bowen Terrace Site

Taryn Paris
4 Min
Exclusive

Accor Deputy Delivers Verdict on Brisbane Games Hotel Shortfall

Phil Bartsch
6 Min
Qld Budget 2025-26 Brisbane City
Exclusive

Billions Promised, Now Deliver: Industry’s Qld Budget Verdict

Vanessa Croll
6 Min
Medium Density housing in NSW
Exclusive

NSW Budget ‘Groundbreaking’ $1bn Guarantee to Unlock Housing

Leon Della Bosca
7 Min
View All >
Residential

National Home Prices End Year on Record High

Lindsay Saunders
Lindfield SSD Resi EDM
Residential

North Shore $154m Apartment Play Tests Zoning Limits

Vanessa Croll
Linic Property Group Saunton Jindalee
Residential

Linic Group Moves 43-Unit Jindalee Scheme Ahead

Leon Della Bosca
The five-storey $26-million project 200m from Indian Ocean promises “new benchmark in coastal living” …
LATEST
Residential

National Home Prices End Year on Record High

Lindsay Saunders
3 Min
Lindfield SSD Resi EDM
Residential

North Shore $154m Apartment Play Tests Zoning Limits

Vanessa Croll
2 Min
Linic Property Group Saunton Jindalee
Residential

Linic Group Moves 43-Unit Jindalee Scheme Ahead

Leon Della Bosca
3 Min
Markets

Australia’s Top 20 REITs Revealed

Shravanth Reddy
6 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/house-price-rebound-gives-rba-pause