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Central Bank of Australia warns of rising housing as rates remain at record lows

For Swati Pandey

SYDNEY, April 6 (Reuters) – Australia’s central bank dropped interest rates to a record low on Tuesday in a widely anticipated move, but warned it would “carefully” monitor trends in property debt as the housing market soars. the House.

The Reserve Bank of Australia (RBA) also reiterated its commitment to continue pursuing an accommodative monetary policy for as long as necessary to reduce unemployment and boost inflation, noting that the interest rate will remain. by 0.1% until at least 2024.

The RBA cut interest rates three times last year, announced a yield curve control program to keep yields on three-year government debt at 0.1%, and launched a massive quantitative easing program for banks. long-term bonds.

This ultra-lax policy has contributed to the country’s real estate market expanding in March at the fastest pace in the last three decades.

In a short statement made after the meeting, Reserve Bank of Australia Governor Philip Lowe explained that the rise in house prices is driven by strong demand from owner-occupiers and first-time home buyers. , although he noted that credit growth for real estate investors remains weak.

“Given the environment of rising house prices and low interest rates, the Bank will closely monitor trends in home loans and it is important that loan terms are maintained,” Lowe said.

Overall, analysts expect financial regulators to impose stricter macroprudential rules on banks this year to help curb risk lending, and the RBA is seen as likely to hold rates at 0.1% for some time.

(Information from Swati Pandey; edited by Shri Navaratnam; translated by Flora Gómez in the Gdansk newsroom)

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