Positive signs for property market: RBA
Australian households are servicing their debts with the arrears rate falling slightly over the past year, according to Australian Reserve Bank Governor Glenn Stevens.
Speaking in Sydney today, Stevens says housing investment has been on the low side but anticipates there’s ample scope for this to rise as signs of an increase in dwelling investment begin.
However, Stevens has warned of a rapid increase in debt.
“Households continue to service their borrowings well – the household arrears rate is low and has fallen slightly over the past year – but we would be risking future problems were we to see a big run-up in debt from here,” he warns.
The speech has also heightened speculation the RBA will cut interest rates in the coming week, with Stevens suggesting “the inflation outlook may afford some scope to ease policy further if needed to support demand”.
This has prompted CommSec to suggest the cash rate will be cut by 25 basis points next Tuesday.
In addition, CommSec data has revealed over the past few months “pent up housing demand is starting to see the housing sector shake off the shackles and begin a much needed resurgence”
(API – 30 Jul 13)
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