It has been a stressful year for mortgage holders with average mortgage repayments increasing by $1,000 a month since the start of 2022. With less cash to spend on other things, this is now slowing down the economy and we saw this most clearly in retail trade figures released last week. Unfortunately however, inflation is yet to slow and with it hitting a 30 year high of 7.8 per cent in December, it was no surprise that the Reserve Bank of Australia increased the cash rate by 0.25 per cent today.
Supply chains are moving more smoothly again
Construction costs are starting to stabilise
Australia doesn’t always follow the US on every metric but most of the drivers of high inflation are the same in Australia this cycle. US inflation is now coming down and now sits below Australian inflation. Rate rises in this country are slowing as a result.
Rising interest rates are designed to slow the economy and we are finally getting signs that this is happening. Building approvals have pulled back significantly and last week we saw retail trade fall for the first time in over a year. Consumers are finally easing off spending which will be another factor driving down spending.
We are getting close but unfortunately November was not the month for a rate cut. Although inflation is now within the target range, hitting 2.8 per cent last week, the RBA decided to keep rates on hold. Why the hesitation? There are a few reasons. The main one being that … Read more
With a rate cut on the horizon, we are again at a turning point for Australia’s property market, making it timely to take another look at what drives price growth. Right now, Melbourne and Sydney are slowing down rapidly, while south east Queensland and Perth continue their strong run. We … Read more