As of 1 December, the ASX's rate tracker ascribed a 98% chance of a hold at Tuesday's monetary policy meeting.
Inflation is heading in the right direction with the 4.9% result for October on the radar, even though the monthly indicator excludes a lot of service items which are keeping the inflation figure elevated.
Retail trade in October was also weak, with the ABS saying consumers "pressed pause" on spending after September and before Black Friday sales in late November.
Major bank economists are forecasting no change for December's meeting.
"The expected decision to leave the cash rate on hold in December should be straightforward," said CBA's Gareth Aird, who also said the economic data does not support the case for a hike.
Others have said future rate rises will be highly sensitive to future economic data, and NAB, ANZ, and Westpac economists have said a February rate hike is possible.
Housing lending, home prices decoupling from monetary policy expectations
The value of new home lending rose 5.4% in October for a total of $26.75 billion in seasonally adjusted terms according to the ABS.
After November's monetary policy meeting, RBA minutes said current financial conditions are "not especially restrictive" to home lending.
Bank economists say the RBA will be watching the flow of credit as it evolves.
"It could be the RBA’s less hawkish communications between July and October 2023 led many to believe the cash rate cycle was over," said NAB's Tapas Strickland.
The average owner occupier loan size was $610,000, which is only 1.2% below the January 2022 peak. External refinancing was down 7% however, implying fewer borrowers are able to find better deals.
"Strong population growth and low listings have contributed to a partial breakdown of the relationship with strong underlying demand for housing meeting limited supply to drive prices higher," said CBA's Harry Ottley.
"The RBA will be alert to the current upswing in the flow of credit as it is an indicator of current financial conditions."
Westpac's Matthew Hassan said the buoyant October lending figure was more in-line with expectations in the context of home prices increasing.
"Annual growth rates show the extent to which rising prices - and average loan sizes - are driving the upturn, the value of owner occupier loans up 12.1% on the year but the number of loans still down slightly, by 0.6% on the year," Mr Hassan said.
When the level of housing credit in the system is measured, it's comparatively weaker at only 4.18% up on 12 months ago, according to RBA figures.
CoreLogic data showed home prices reached a new all-time high in November, though the rate of growth across Melbourne and Sydney in particular slowed.
Domain is forecasting up to 9% house price growth in 2024, according to chief of research Dr Nicola Powell.
"We're actually expecting Sydney houses to lead price growth next year - between a 7% to 9% increase in house prices. But there's other capital cities that are very close to that," Dr Powell told the Savings Tip Jar podcast.
"Brisbane and Adelaide we've forecast between 7% and 8%, and Perth at 6% to 7%."
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