Debelle gives economists an almighty pep talk, and a word of warning
That has meant he's had to apply his economics skills in the real world, at times in extreme scenarios with consequences for the welfare of millions.
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West Australian
2 hours ago
- West Australian
Interest rate cuts fuel prices but housing boom unlikely: AMP
Australia's housing market is unlikely to experience another price boom in line with the Covid surge as affordability constraints outweigh interest rate cuts. Almost all experts (88%, 30/34) from Finder's RBA Cash Rate Survey believe the RBA will cut the cash rate, bringing it to 3.60 per cent in July. Meanwhile, national house prices are on the rise, on the back of interest rate cuts which are spurring on borrowing capacity with PropTrack showing national home prices rose 0.4 per cent in June and are now up 4.6 per cent on this time last year. But while monthly gains were recorded across almost all the capitals, it might not be quite as bad as the last time the RBA cut rates, when house prices soared nearly 25 per cent in 12 months until 2021. That is the view of AMP chief economist Shane Oliver who told NewsWire 'even worse affordability constraints' would not result in a repeat of the post-Covid price surge. 'It will be more constrained this time around. When we came out of Covid, interest rates went to zero and you could get fixed rates around two per cent and variable rates around three per cent,' he said. 'I don't think we are going to see it this time around 'Affordability was arguably better in 2020 because house prices initially fell a bit. 'So there was super duper low interest rates and prices coming off a dip which is why there was a supercharged rebound in prices. 'This time around we are seeing the normal relationship outside of recessions with lower rates just meaning higher prices and unfortunately worsen the affordability problem.' REA group senior economist Eleanor Creagh agreed, saying house prices won't run as hard as previous cycles. 'Market momentum is building amid renewed buyer confidence and improved sentiment, buoyed by falling interest rates and expectations of another rate cut in July,' she said. 'However, the upturn remains measured as affordability constraints keep the pace of growth in check.' The Reserve Bank of Australia has cut interest rates twice since inflation was contained – in February and May – and is widely forecast to slash the official cash rate on Tuesday following its July board meeting. After a short-lived price reprieve in late 2024, home prices are at peak levels across the country, with Melbourne and Hobart being the exception. Dr Oliver said every 0.25 per cent cut in rates by the central bank adds around $9000 that the average Aussie can borrow. This would theoretically add $27,000 to first-home buyers' borrowing capacity. 'It's a rough guide but it depends on whether people borrow the full amount and how many buyers there are to sellers,' he said. 'But if every borrower has an extra nine grand following every rate cut then it could mean house prices go up by the same amount, it could mean house prices go up by the same amount and is why over time the benefit to home buyers of lower interest rates tends to be lost to higher house prices.' Dr Oliver said rate cuts would likely make things worse for first home buyers if the RBA continues to cut interest rates. 'If we had a more normal property market and the supply of new homes was in line with the growth of the population then lower interest rates at times could help first home time buyers,' he said. 'But in the current environment, when there is an imbalance between demand and supply, it just makes the situation worse.'
West Australian
3 hours ago
- West Australian
Australian news and politics live: RBA expected to cut rates again, calls for national anti-hate taskforce
Scroll down for the latest news and updates. Australians are bracing for another interest rate cut, with the Reserve Bank of Australia widely expected to lower the cash rate by 0.25 percentage points at 2.30pm on Tuesday, bringing it to 3.60 per cent. All four major banks: ANZ, Commonwealth Bank, NAB, and Westpac have forecast the move, citing weaker household spending, softer inflation, and ongoing global uncertainty as key drivers. Economists say a cut would trim around $76 a month from repayments on a typical $500,000 mortgage, adding up to nearly $230 in savings from three cuts since February. While that's welcome news for existing borrowers, it's also intensifying competition in the property market, with buyers rushing to secure homes before prices climb further. Read more.
The Age
4 hours ago
- The Age
Australian News LIVE: Inside the mushroom murderer court case, new Trump tariffs; rate cut decision looms
Latest posts Latest posts 6.56am Alex de Minaur's Wimbledon campaign ends in disappointment By Marc McGowan Australia's hopes of a Wimbledon win have been toppled after Australian Alex de Minaur's loss to Novak Djokovic. With Roger Federer watching from the royal box, Australia's perennially underestimated tennis torchbearer returned to Wimbledon's centre court for the showdown he was supposed to have 12 months ago – and fell agonisingly short. Read how it played out here. 6.47am Are rate cuts coming? Australia awaits RBA decision By Millie Muroi and Shane Wright All eyes will be on the Reserve Bank this afternoon with RBA governor Michele Bullock expected to deliver its fastest cut in interest rates since the early days of the COVID-19 pandemic. On a $600,000 mortgage, a rate cut on Tuesday would be worth $100 a month and take to $300 the monthly savings since the Reserve Bank started easing monetary policy in February. However, not all economists are convinced the RBA will cut rates on Tuesday. Betashares chief economist David Bassanese said the bank could wait until the next quarter inflation report, due to be released at the end of the month, to get a better handle on how the economy was performing. Read our full story here. 6.38am This morning's top stories at a glance By Emily Kowal Good morning and welcome to today's national news blog. My name is Emily Kowal, and I will be taking you through today's top stories. It's Tuesday, July 8. Here's what is making news this morning. It's the case that gripped the world and now Erin Patterson has spent her first night behind bars after she was found guilty in the mushroom murder case. Our reporters take you inside the evidence we couldn't publish during the trial, including the moment Erin Patterson lost her cool, and where the unlikely murder weapon was found. In the United States, US President Donald Trump has unveiled a raft of new 25 per cent tariffs. Find out which countries are impacted here. It's (likely) rate cut day, with the Reserve Bank poised to deliver its fastest cut in interest rates since the early days of the COVID-19 pandemic. NSW Police will drop some of the charges laid against former Greens candidate Hannah Thomas after a review found officers incorrectly sought to use extraordinary emergency powers introduced to quell major riots.
