Skip to main content Skip to main navigation
Skip to access and inclusion page Skip to search input

BILL’S BITES: Return of property investors yet to stir RBA

07:03pm April 07 2021

Westpac chief economist Bill Evans discusses the outlook for RBA policy and the housing market. (Josh Wall) 

As expected, the Reserve Bank maintained its policy settings this week, including the targets of 10 basis points for the cash rate and the yield on the three-year Australian government bond. 

Since the last Board meeting on March 2, the most important economic developments have been the surprise fall in the unemployment rate from 6.4 per cent in January to 5.8 per cent in February and reports of extraordinary strength in the national housing market.

The unemployment report prompted only a minor change in the Governor’s rhetoric from “the economy is still operating with considerable spare capacity and the unemployment rate remains higher than it has been for some years” (March) to “the economy is operating with considerable spare capacity and unemployment is still too high” (April).

Rising house prices were recognised. But the same approach we saw in March is adopted where lending standards are emphasised, “the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”

Importantly, the Governor points out that “investor credit growth remains subdued”.

It is interesting that he did not comment, at this stage, on the recent trend for new lending for housing. In February new lending for investors lifted by 4.5 per cent in the month compared to -0.8 per cent for “upgraders” and -4 per cent for first home buyers.

In fact, the six-month growth rate for new investor finance approvals (31 per cent) is now above the upgraders’ rate (24 per cent) and first home buyers (30 per cent). 

No doubt the Board will be watching these trends very closely.

Continue reading at Westpac IQ

The information in this article is general information only, it does not constitute any recommendation or advice; it has been prepared without taking into account your personal objectives, financial situation or needs and you should consider its appropriateness with regard to these factors before acting on it. Any taxation position described is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and our interpretation. Your individual situation may differ and you should seek independent professional tax advice. You should also consider obtaining personalised advice from a professional financial adviser before making any financial decisions in relation to the matters discussed.


William (Bill) Evans is Westpac’s economic spokesman and is responsible for all of our economic research. In 1991, Bill joined Westpac as the Chief Economist and Head of Research. A graduate of Sydney University (BEc. Hons I and University Medal) and the London School of Economics (M. Sc.), Bill has worked as Research Manager for the Reserve Bank of Australia and as a Treasurer at the Commonwealth Bank of Australia. Bill travels frequently, advising Westpac’s customers on the Australian economy and financial markets.

Browse topics