The RBA says it feels the decision to maintain the official cash rate at 3% at its last meeting was ‘prudent’, but admits the inflation outlook will provide scope to ease further, ‘should that be necessary to support demand’.
Speaking to the House of Representatives today, governor Glenn Stevens told attendants that housing investment is likely to strengthen in coming months, given that several factors are supportive, but warned that it’s still early days.
“Interest rates are low, housing prices are tending to rise, gross rental yields have increased, population growth remains strong and is even picking up a little. Admittedly, we are as yet very early in this phase.”
Looking ahead, Stevens said it appears the peak in the level of resource sector investment is close.