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The Reserve Bank of Australia has left the national interest rate on pause at 4.35% in further pain for mortgageholders.
Of course, at the same time, the Australian economy saw unemployment numbers fall by 10,000 persons while it remained unchanged at 3.2% MoM in August. That indicates the Australian economy is still too hot.
Since brent crude prices have fallen in 2H CY2024, the main driver of inflation in Australia has become housing. PropTrack Senior Economist Eleanor Creagh predicted the RBA would keep things paused in its latest decision.
“Home price growth has persisted despite the higher interest rate environment,” Creagh said.
“Prices have now cycled through 20 consecutive months of growth, although performance differs significantly around the country … [and] Home prices are expected to rise in the period ahead.”
While PropTrack’s Creagh would benefit from investors thus deciding to enter the property market, the assessment is clear – in a national context of low supply and low capacity available to address supply, housing prices are set to remain a key driver for domestic inflation.
And the RBA has no way to fix that.
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