PHOTO: The Reserve Bank
The Reserve Bank has signalled that more cuts to the official interest rate could come although they advised of concerns of refuelling a property bubble in Sydney and Melbourne.
The October meeting saw the cash rate cut to a record low of 0.75 per cent.
The RBA board minutes noted “the housing market and other asset prices might be overly inflated by lower net interest rates”.
“This assessment would need to be reviewed if rapidly increasing asset prices were accompanied by materially faster credit growth, weak lending standards and rising leverage,” the minutes noted.
The members saw a limited risk of excessive borrowing.
Members acknowledged that asset prices were part of the transmission mechanism of policy, including by encouraging home building.
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