RBA's SoMP maintains inflation and GDP forecasts

The RBA's Statement on Monetary Policy preserved its rather bullish outlook, upgrading near-term GDP forecasts and leaving the CPI expectations unchanged. The RBA has also offered guidance on which house price index supplier it follows most closely, and its growing reliance on monthly as opposed to quarterly data (pages 31-32):

“In the established housing market, conditions have eased in the June quarter. Data from RP Data-Rismark suggest that monthly growth in housing prices slowed in April and May and that prices fell in June (Graph 40). The cooling in the housing market is also apparent in a slowing in quarterly average price growth (Table 8). Auction clearance rates, which are timely indicators of housing market conditions, have also fallen over recent months from near historic highs to around average levels (Graph 41).

The moderation in housing price growth has been relatively broad-based across capital cities and regional areas, with signs that the previous strong growth in Melbourne house prices has eased (Graph 40). The slowing in housing price growth is broadly consistent with recent developments in housing finance, with housing loan approvals having fallen by around 15 per cent from their September 2009 peak.”