All major housing markets see price rises: RBA

The RBA noted housing credit growth had picked up, with strong demand from owner-occupiers, especially first-home buyers.

The RBA board has noted that housing markets have strengthened further, "with prices rising in all major markets."

It noted housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers.

It also acknowledged there has also been increased borrowing by investors.

"Given the environment of rising housing prices and low interest rates, the bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained," the bank governor Dr Philip Lowe advised.

The bank again advised it will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.

"For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently.

"This is unlikely to be until 2024 at the earliest," Dr Lowe noted.

It added "an important ongoing source of uncertainty (in the economic recovery) is the possibility of significant outbreaks of the virus, although this should diminish as more of the population is vaccinated."

The rate decision came after CoreLogic advised Australia's COVID-19 property boom continued in May with housing prices up 2.2 per cent which puts it at more than 10 per cent since the pandemic hit.

Hobart and Sydney had the strongest price growth in May.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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