Demand for housing credit by investors remained subdued, the RBA noted in their minutes for the November meeting where they left the official cash rate on hold at a record low 0.75 per cent.

"Despite the stronger-than-expected pick-up in established housing markets, there had been little evidence of a lift in the early stages of residential development activity, RBA Governor Philip Lowe suggested in the minutes.

He added that risks in the near term to growth from dwelling investment were tilted to the downside, although then went on to make mention of the decline in building approvals, down over 20 per cent over the year.

"Liaison with industry participants suggested that the recent improvement in housing market conditions had not yet translated into stronger sales for new housing," Lowe said.

He said that a larger-than-expected contraction in dwelling investment could delay the gradual improvement in GDP growth.

"Members noted that the recent strengthening in housing market conditions would support building activity in time.

"The lagged response to higher housing prices and a period of low building activity had raised the likelihood that dwelling investment would be stronger in the medium term than currently expected."

Lowe cited the increase in housing loan approvals, which had risen strongly since May, largely driven by owner-occupiers.

"Members noted that there was strong competition for borrowers of high credit quality," Lowe said, although added that despite the competition, the pace of growth in housing credit for owner-occupiers had picked up only slightly, while the stock of housing credit for investors had continued to decline a little.

Rebounding Markets

There were further mentions of the rebounding Sydney and Melbourne housing markets, with Brisbane now mentioned in the same breathe.

Lowe said conditions in Brisbane had "firmed", although noted housing conditions remained weak in Perth and Darwin.

"In Sydney and Melbourne, housing prices had been on an upward trajectory since June, the number of auctions had increased and auction clearance rates had been at relatively high levels.

Borrowing Rates

Lowe said a large share of the recent monetary policy easing had been passed through to mortgage rates, but cited the lack of movement from the banks following the October cut.

"Borrowing rates for households and businesses were at historic lows," Lowe said.

"After passing through most of the June and July cash rate cuts to standard variable mortgage rates (SVRs), financial institutions had passed through less of the October rate cut, bringing the total reduction in SVRs since June to around 60 basis points.

"Strong competition for high-quality borrowers had led to rates for new and refinanced loans being lower than for existing loans.

"In addition, borrowers were continuing to switch from interest-only loans to lower-rate principal-and-interest loans.

"This meant that average outstanding mortgage rates had declined by around 65 basis points since the middle of the year. This process was expected to continue."