As predicted the RBA Board have announced to hold the Interest rate at 1.5%.
In his statement, Governor Phillip Lowe said:
- In the housing market, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments. Turnover in the housing market and growth in lending for housing have slowed over the past year.
- The rate of increase in housing prices is also lower than it was a year ago, although prices in some markets have been rising briskly over the past few months.
- Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in rents is the slowest for some decades.
- The global economy is continuing to grow, at a lower than average pace
- …higher commodity prices have supported a rise in Australia’s terms of trade, although they remain much lower than they have been in recent years.
- In Australia, the economy is growing at a moderate rate. The large decline in mining investment is being offset by growth in other areas, including residential construction, public demand and exports.
- Household consumption has been growing at a reasonable pace, but appears to have slowed a little recently. Measures of household and business sentiment remain above average.
The Bank’s forecasts for output growth and inflation are little changed from those of three months ago. Over the next year, the economy is forecast to grow at close to its potential rate, before gradually strengthening. Inflation is expected to pick up gradually over the next two years.
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