RBA Says House Prices Stabilising
The RBA has revealed that stabilising house prices were a factor in its surprise decision to keep the official cash interest rate on hold this month.
Recently released minutes from the monetary policy meeting of the Reserve Bank Board reveal a generally upbeat assessment of the challenges facing the Australian economy, including the observation that housing prices showed some stabilisation around the end of 2011, “after having declined for most of the year”.

“While housing prices had declined over 2011, there were signs of stabilisation in some major cities around the end of the year," said the minutes.

The Board did note, however that construction remained subdued due to the pull-forward from the earlier boost to grants to first home buyers, slower population growth, tight access to credit for developers and lowered expectations of capital gains.

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