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The Reserve Bank of Australia has warned that the growth in the housing market is cooling off, with the rapid increase in property prices beginning to ease.
In the minutes of their monthly board meeting, the RBA noted the established housing sector appears to be losing momentum.
“There had been signs of a tempering in conditions in the established housing market,” the minutes stated.
“Members observed that, looking through the monthly volatility, housing price inflation had slowed over recent months, auction clearance rates had fallen from the high levels seen late last year, and loan approvals had been little changed over the past six months.”
At the same time, investor activity in the property market remains at a 10-year high.
“Dwelling investment increased noticeably in the March quarter and, over the six months to March, was running at close to the fastest pace seen in around a decade,” the minutes stated.
Residential construction activity has eased in recent times but remains elevated.
The Reserve Bank predicted this sector would continue to surge ahead.
“Residential building approvals had declined somewhat in recent months, but they remained at relatively high levels and both work yet to be done and loan approvals for new dwellings pointed to further strong growth in dwelling investment in coming quarters,” the minutes stated.
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