After keeping the official cash rate on hold at 2.5 per cent for the 14th consecutive month, the RBA noted that the accomodative monetary policy was continuing to put downward pressure on lending rates.
“Members noted that the current setting of monetary policy was accommodative, with lending rates remaining very low and continuing to edge lower over recent months as competition to lend had increased,” the RBA minutes said.
“In this context, members discussed the importance of lenders maintaining strong lending standards and the ongoing dialogue between the bank and APRA on the matter.”
The RBA noted that dwelling investment had increased by more than eight per cent over the year to the June quarter, and continued strength in building approvals and other indicators pointed to further growth in coming quarters.
“House price growth had been a little slower, on average, over 2014 than in late 2013, but remained consistent with strong conditions in the established housing market.
“Over the previous six months, overall housing credit growth had been steady at around seven per cent in annualised terms, but members noted that growth of investor credit had increased to close to 10 per cent.”
Members concluded their discussion by observing that lending rates in Australia continued to edge down marginally in September.
Financial markets continued to expect that the cash rate would be unchanged over the following 12 months, the minutes said.