CANBERRA, AAP – Reserve Bank governor Philip Lowe says the central bank “does not and should not” target housing prices.
“Instead our focus is on the lending that is used to purchase housing. We want to see lending standards remain strong,” Dr Lowe said in testimony at a parliamentary economics committee hearing.
“At present, there are few signs of a deterioration in these standards.”
Dr Lowe said the Reserve Bank is “watching closely” the housing market and its many moving parts.
Record low interest rates, a shift in preferences towards houses and regional locations, “large government incentives” for first home buyers, the slowest population growth in a century, very high rates of house building, and a decline in apartment rents in Sydney and Melbourne are all in the mix.
But the housing market has been more resilient than expected and Dr Lowe said this has been helpful in terms of the overall economy.
“The past year would have been even more complicated if there had been large and widespread falls in housing prices,” he said.
“Housing prices are now rising across most of the country. Even so, the national housing price index is only around the level reached four years ago.”