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PERTH, Feb 15

February 15 2013, 6:18PM

Lower interest rates are helping to boost the Australian housing market and have a positive effect on the equity market, the central bank says.

Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent says the most recent readings show consumers are feeling better than average on a number of indicators.

"If you look at the surveys they've been showing quite positive trends around the end of last year," Dr Kent told a business lunch in Perth on Friday.

"And at least at the margin interest rates are relatively low so I think that's helping.

"One thing it's doing is helping the housing market."

He told the Committee for Economic Development of Australia (CEDA) forum that firmer asset prices were helping to buoy the equity market while inflation remained pretty well contained.

"We'd like to see inflation stay in the target."

Dr Kent said wages growth should follow from productivity, an area on which the central bank will focus its attention.

"We can get more wage growth without jeopardising inflation if there's productivity there to back it up," Dr Kent said.

In a wide ranging speech, Dr Kent also said the mining investment boom would peak sooner and at a lower level than previously expected.

While commodity prices were likely to drift lower over the next few years, Australia would continue to benefit from China's economic expansion.

Export volumes for resources are set to rise steadily as new mines come into operation.

Dr Kent said that the boom in mining investment was expected to peak this year, with the sector accounting for around eight per cent of gross domestic product at its high point.

But he warned that commodity prices were likely to fall over the next few years as more mines came on line to meet demand from China.

"This reflects the extra supply generated by the substantial amount of mining investment underway in Australia and elsewhere."

Coal and iron ore prices slumped in mid to late 2012 as growth in China slowed, causing miners to shelve or ditch a number of planned resource projects.

Still, the rebound in prices since December had not affected investment plans in the industry.

Dr Kent said Australia was still well placed to benefit from China's continued growth, with production from new mines to help boost export volumes.

Further strong growth is anticipated, particularly for liquified natural gas (LNG), which is expected to grow much more rapidly from around 2015, he said.

By Kim Christian And Evan Schwarten