At its first meeting for the year, the Reserve Bank of Australia (RBA) has decided once again to leave the official cash rate at 1.5%. Rates have been on hold since last August’s cut.

The latest data continues to report a mixed performance by the national economy, according to Andrew Wilson, chief economist at the Domain Group.

“The jobless rate has risen, planned construction and retail sales trends continue to weaken, and wages growth and inflation are at record low levels. Full-time jobs are falling and the dollar continues to track at higher than desirable levels despite higher interest rates in the United States,” he said.

Overall, the economy is continuing its transition following the end of the mining investment boom. Although GDP was weaker than expected in the
September quarter, a return to reasonable growth is expected in the December quarter.

“Conditions in the housing market vary considerably across the country,” said Governor Philip Lowe in an official statement about the board’s monetary policy decision. “In some markets, conditions have strengthened further and prices are rising briskly. In other markets, prices are declining.”

A large supply of new apartments is scheduled to come on stream in the eastern capital cities, which should positively impact housing supply. While growth in rents is the slowest it has been in decades, borrowing for housing has picked up slightly due to stronger demand from investors.

“With leverage increasing, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments,” Lowe said.