The Reserve Bank of Australia (RBA) has delivered good news by forecasting low interest rates and strong housing growth.
RBA Governor Glenn Stevens told parliament last week that Australia’s low interest rates had been helping the economy and were likely to remain low for the foreseeable future.
“We have signalled the likelihood, if the economy evolves more or less as expected, of a period of stability in the cash rate. As well as the low level of interest rates generally, a sense of stability should be of some help for businesses and households as they form their plans,” he said.
Mr Stevens said the low interest rates had made lenders more willing to approve loans and spurred credit growth of almost nine per cent for housing investors.
“It is clear that dwelling investment activity will rise strongly over the period ahead. Over the past three months, approvals to build private dwellings numbered almost 50,000,” he said.
“That is an increase of about 27 per cent from the figures of a year earlier, and is the highest three-month total in the 30-year history of this series.”
Mr Stevens also said consumer sentiment was “a little skittish”, although he forecast an improvement in business investment outside the mining sector.