Growth in Sydney, Melbourne housing prices remains brisk: RBA

Minutes of the May Monetary Policy Meeting of the Reserve Bank Board notes growth in housing prices had remained brisk in Sydney and Melbourne, where population growth had been relatively strong, but had been weak in Perth.

According to the RBA, Perth's population growth had fallen significantly following the end of the mining investment boom.

"At the same time, there had been some indications that the large increase in supply in the inner-city Melbourne and Brisbane apartment markets had weighed on prices, particularly in the case of Brisbane," the RBA noted.

"The large amount of residential construction still in progress was expected to support dwelling investment in the near term.

"Building approvals had been lower over prior months, particularly for higher-density dwellings, suggesting that this pipeline of construction work would continue to be worked off in coming quarters.

"Members noted that changes in the rate of home-building lag changes in population growth and that this had affected housing prices in some markets in the preceding few years.

"If households were becoming more focused on paying down debt, this would imply some downside risks to the outlook for household consumption growth. A fall in housing prices could also weigh on consumption growth."