House price growth slowing: RBA October board minutes

Reserve Bank of Australia board members have noted the ongoing strength in the housing market, but sense momentum is slowing.

"Dwelling investment had increased by more than 8% over the year to the June quarter, and continued strength in building approvals and other indicators pointed to further growth in coming quarters," the October board minutes noted.

"House price growth had been a little slower, on average, over 2014 than in late 2013, but remained consistent with strong conditions in the established housing market.

"Over the previous six months, overall housing credit growth had been steady at around 7% in annualised terms, but members noted that growth of investor credit had increased to close to 10%."

It reported growth in dwelling investment had been strong, whereas mining and non-mining business investment in aggregate had fallen over the year.

On employment the minutes noted members recognised that historically slow wage growth outcomes were consistent with spare capacity in the labour market.

They also noted that the recent labour force data had been quite volatile, suggesting the possibility of some measurement problems.

The unemployment rate in August had retraced the sharp rise recorded in July to be close to 6 per cent, around the average of the monthly unemployment rate over the year to date. Employment had reportedly increased substantially in August, driven by an exceptionally strong rise in part-time employment.

"Looking at a broader range of data, members concluded that labour market conditions remained subdued, although they appeared to have stabilised somewhat over the course of 2014 to date.

"Forward-looking indicators had picked up a little, but still pointed to only modest employment growth over the coming months," the minutes concluded.