Queensland-Housing shows the way in the non-mining recovery

The Reserve Bank of Australia has today kept the cash rate at 2.5%, highlighting which hopefully signals an improved outlook for the Australian and Global economies.

Housing remains the ''Bright Light'' in the “Non-Mining Recovery”, with prices in the capitals cities continuing to rise as building approvals increase.

Interest rates remained at a record low, boosted by strong demand from investors at the expense of first home buyers, figures released on Monday showed.

''Rising house prices, low interest rates and robust population growth suggests that residential housing activity should remain elevated,'' said St George economists Hans Kunnen and Janu Chan, with the sector still the ''bright spot'' in the economy.

Residential investment should make a solid contribution towards economic growth in 2014 with signs of growth in the housing sector and after the strong rise in consumer prices in the three months to December, which practically closed the door on an interest rate cut at the Reserve Bank's first board meeting in January of 2014.

Australia's eight capitals recorded a 1.2 per cent growth in prices last month, after a 9.8 per cent rise last year, said RP Data-Rismark's January report on home values.

The monthly figures were still healthy, economists said, as approvals remained above 16,000 for four months, the strongest growth since the measure started in 1983.

A separate survey from ANZ, also released on Monday, found that job advertisements continued to fall, but at a slower pace. Advertisements were 0.3% lower last month, falling to 3 per cent in the past six months, ANZ said.

Also on Monday, a survey of manufacturers by the Australian Industry Group showed the sector continued to soften last month, and inflation also softened last month, a TD Securities-Melbourne Institute gauge showed.

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