The RBA released the minutes of their meeting on Melbourne Cup Day. They really add little to the sum of human knoweldge! However, they do admit housing is getting more complicated.
Members noted that assessing conditions in the housing market had become more complicated. While overall conditions had eased relative to 2015, some indicators had strengthened over the previous few months. In particular, housing price growth had picked up noticeably in Sydney and Melbourne. However, housing turnover and growth in housing credit both remained lower than a year earlier, consistent with the supervisory measures that had been taken to tighten lending standards and the more cautious attitude to lending in certain segments. In addition, a considerable supply of apartments is scheduled to come on stream over the next few years, particularly in the eastern capital cities, and growth in rents in the September quarter was the slowest for some decades.
Of note is their bank funding costs comment:
There had been little change to bank deposit rates in October, with the exception of some reversals of previous increases in term deposit rates by the major banks. The cost of banks’ funding sourced from wholesale debt markets had declined by almost 20 basis points since the August cash rate reduction and was expected to decline further as the cost of new issuance remained below the cost of outstanding debt. There had been little change to housing or business lending rates in October.
This may change now, given recent ructions on the international scene, post Trump.
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