The Reserve Bank governor has allayed concerns over growth in housing credit after the central bank left the cash rate unchanged yesterday.
In his statement of monetary policy, governor Glenn Stevens
said credit growth is stabilising, particularly in the closely-watched housing market.
“Credit is recording moderate growth overall. Growth in lending to investors in housing assets is stronger than to owner-occupiers, though neither appears to be picking up further at present.”
However, Stevens noted that lending to businesses has been strengthening recently.
While he acknowledged “strong” price rises in the Sydney property market, he said it is important to note that “trends have been more varied in a number of other cities”. However, the bank will still be working with other regulators to assess and contain risks that may arise from the housing market.
As the Australian economy continues to grow at below-trend pace while the Australian dollar remains slightly elevated, Stevens says the board will continue to assess the case for further cash rate cuts in the future.
“Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target,” he noted.