The batch of economic data on Wednesday, June 30 were far from weak, with credit for housing and business up more than expected and job vacancies holding at healthy levels.
But there was enough sign of moderation to underline expectations the Reserve Bank of Australia (RBA) will skip a hike in interest rates at its next policy meeting on July 6.
Investors had already priced out any chance of a rise in the 4.5% cash rate given the latest ructions in global financial markets and doubts about world economic growth.
"The RBA is likely pleased that housing related indicators, particularly house prices, have moderated with consumption also more tempered amid some rebuild in household savings," said Su-Lin Ong, a senior economist at RBC Capital Markets.
Having hiked by 150 basis points in eight months, the RBA paused at its June policy meeting saying rates were now appropriate for the near term.
Markets show scant chance of a rise for many months to come, though much might depend on what key inflationvfigures for the second quarter show when released on July 28.
"It will likely take a high reading for core inflation to push them over the line in August," said Ong. "The risk of downgrades to global growth coupled with market turmoil suggests that this rate pause could turn into something more prolonged."
Particularly cheering for the central bank would be industry data showing house price growth was cooling from the red-hot pace of last year.
The well-respected RPData Rismark measure of city home prices rose 0.6% in May after a 0.2% increase in April. That compared to average monthly increases of 1.1% in the previous six months.
Prices for homes outside the major cities, which make up 40% of all homes, dipped 0.9% in May while growth for the year slowed to 5.8%, from 6.7% in April.
Auction clearance rates had also eased back in recent weeks while sales of new homes fell by 6.4% in May.
But, equally, there was little to suggest that house prices were at risk of falling anytime soon. Annual growth for city prices, where demand is greatest and supply most constrained, was still running at a brisk 12.1% in May.
"These data reveal that the housing market is cooling, but far not collapsing," said David de Garis, a senior economist at NAB. "To the RBA, they reflect more resilience across most capital city markets than might have been anticipated."
Neither was there much sign of credit rationing by banks. Figures on home loans showed annual growth in credit outstanding picked up to 8.6% in May, the fastest pace in 20 months.
Overall credit rose by 0.5% in the month, compared to April, with business borrowing up by the most in 16 months.
Consumers seemed more cautious, with personal borrowing on credit cards, autos and the like falling by 0.5% in May.
That gelled with complaints from retailers of slow sales in the month despite widespread discounting.
Yet consumer confidence, and spending power, should be underpinned by a solid labour market. Government data out Wednesday showed job vacancies dipped 2.8% in the three months to May, but that unwound just a little of the previous quarter's 12.1% surge.Overall vacancies of 164,600 were still consistent with healthy employment growth toward 3% a year, promising to nudge the jobless rate down from an already low 5.2%. -- Reuters
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