Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn
About

News

Rates on hold amid housing debt worry

Melissa Jenkins  |  03 Oct 2017Text size  Decrease  Increase  |  
Email to Friend

Page 1 of 1

MELBOURNE - [AAP] The central bank has kept the official cash rate on hold as it continues to worry about housing debt growing faster than wages.

Reserve Bank of Australia governor Philip Lowe said recent economic data supported the bank's view the economy will gradually grow over the coming year and showed investment from non-mining sectors of the economy was improving.

But the central bank remained concerned about the high level of housing debt in an environment where wages growth will remain low for a while yet.

"Growth in housing debt has been outpacing the slow growth in household incomes for some time," Dr Lowe said in a statement on Tuesday, announcing the official interest rate would remain on hold at 1.50 per cent.

He noted growth in investor borrowing has slowed recently following the introduction of supervisory measures by the Australian Prudential Regulation Authority.

"Housing prices have been rising briskly in some markets, while in others they have been declining," he said.

"In Sydney, where prices have increased significantly, there have been further signs that conditions are easing."

The Australian dollar fell following the RBA rate announcement, dropping below 78 US cents for the first time since mid-July and remaining at that level by 1457 AEDT.

 

AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend