“Notwithstanding month-to-month volatility, building approvals had increased since the middle of 2012, particularly in states other than Victoria, and prices and rental yields in the established housing market had also picked up.”
Following the December cash rate announcement, the RBA says most Australian lenders reduced their standard variable housing rates by around 20 basis points.
“This reduction had brought the average interest rate on outstanding housing loans to well below its longer-run average and only a little above its 2009 low. Rates on small and large business loans were also close to their 2009 lows.”
RBA board members were also briefed on the GDP outlook, which is forecast to be slightly below trend at 2.5% over 2013.
However, they were also told that ‘improving’ conditions in the housing market are expected to continue to provide support to dwelling investment, while non-mining business investment is expected to pick up gradually over time.