The minutes of the Reserve Bank’s board meeting on March 1 gave no indication that another interest rate rise was imminent.

Key to this decision was a steady outlook for economic growth and inflation, aside from the transitory effects of wild weather, which would boost inflation and depress growth over the December and March quarters before having the opposite effects later in 2011.

Much of the discussion of domestic conditions was around the effect of the floods and Cyclone Yasi, but the minutes reiterated the RBA’s determination not to be distracted by these short-term effects.

‘‘Members confirmed that the board’s approach would be to look through temporary effects caused by extreme weather events and to continue to set monetary policy based on the medium term outlook for growth and inflation.’’

With the unemployment rate already at a low five per cent and the RBA’s latest official forecasts already showing inflation heading to the top of the target range over the coming two years, the main risk for the future is still rising inflation rather than slowing growth.

Accordingly, the odds still favour another increase or two in the cash rate from the current 4.75 per cent.

Still, the minutes show no sign the RBA is contemplating such a move in the next few months.

Intensified competition between the majors has done little to stimulate buyer interest, new research has found.

According to data from the Australian Bureau of Statistics, the number of loans granted to build or buy houses and apartments dropped for the first time in seven months, falling 4.5 per cent from December.

ANZ economist David Cannington said the drop in demand can be largely attributed to the spate of natural disasters earlier this year.

Demand for loans in Queensland plunged 16 per cent as the state was devastated by floods and cyclone Yasi.

“The initial impact of the recent floods weakened housing finance activity,” Mr Cannington, wrote in a report.

But while the Queensland floods cannot be underestimated, mortgage approvals also dropped 5 per cent in Victoria, 4 per cent in NSW and 2.3 per cent in Western Australia.

Source: www.theadviser.com.au

The number of property transactions fell 20 per cent in 2010, new research has revealed.

According to statistics from RP Data, sales volumes fell in every capital city, with Darwin recording the biggest drop at 30.3 per cent.

Research analyst Cameron Kusher said sales volumes of houses and units in late 2010 slumped to similar levels of those recorded during the depths of the Global Financial Crisis.

Mr Kusher added that “Although we are not anticipating much in the way of property value growth during 2011 some indicators suggest that sales volumes will improve. Unemployment is at 5.0 per cent, wages are growing at a level above inflation and limited growth in property values coupled with wage growth is likely to improve housing affordability.”

Source: www.theadviser.com.au

The war between Australia’s major lenders shows no signs of abating, with Westpac slashing rates across a number of its mortgages.

Yesterday, the major announced its plans to cut the interest on its two, three, four, five and 10 year home and investment property fixed loans.

The lender cut up to 20 basis points from the various products, taking its two year fixed rate to just 7.39 per cent from 7.54 per cent.

Westpac’s general manager broker distribution Huw Bough has indicated that Westpac seeks to increase market activity by offering a range of competitively priced products.

Source: www.theadviser.com.au