RBA leaves rates unchanged as it waits for inflation and unemployment to hit targets

07 April 2021

The RBA has left interest rates unchanged this month but says it is keeping close watch on the booming housing market.

Governor Philip Lowe said housing markets around the country had strengthened with widespread price rises and strong demand from owner-occupiers and first-home buyers.

“In contrast, investor credit growth remains subdued,” he said.

“Given the environment of rising housing prices and low interest rates, the bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”

House prices have been growing at the fastest rate in 32 years with home lending and building approvals up near record-high levels.

It was also the busiest Easter on record with 874 home auctions held over the weekend.

Mr Lowe said the Reserve Bank was determined to maintain highly supportive monetary conditions until its goals were met, and won’t raise the cash rate until inflation hit that 2-3 per cent mark.

This would only happen with meaningful wage growth off the back of improvements to the unemployment rate.

“The board does not expect these conditions to be met until 2024 at the earliest,” he said.

“The bank is prepared to undertake further bond purchases if doing so would assist with progress towards the goals of full employment and inflation.”


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