Rapid apartment construction holding back price inflation: RBA

RBA board members noted that very low interest rates would continue to support growth in dwelling investment and household consumption.

But they added in their September minutes that there were indications that the measures implemented by APRA had slowed the growth in lending for investment housing.

They noted dwelling prices continued to rise strongly in Sydney, "though trends had been more varied across other cities."

Indeed while the strength in housing price inflation had been concentrated in Sydney and Melbourne, mainly for detached houses, the RBA summarised housing price inflation has having been modest in other parts of the country and "negative in some market segments."

Members noted that rapid growth in the construction of new apartments had helped to hold down inflation of their prices.

It also noted there had been a notable decline in the growth in lending for investment housing in July.