Australian Housing Affordability and RBA Announcements Coincide
Quick Summary The official cash rate dropped to 1.00% as: · Consumer price inflation hovers around 1.3%; · The Australian dollar fell to 70.01c US; and · Unemployment dropped to 5.2%. The recently published ANZ-CoreLogic Housing Affordability Report shows how housing affordability and Reserve Bank announcements are linked . Despite being released in June, prior to the Reserve’s announcement that they were dropping the official cash rate to 1.00%, data published in the report signifies how housing affordability is a crucial driver of monetary policy. According to the report, factors that have eroded housing affordability in Australia include interest rates and inflation, along with financial deregulation. However, the report notes that housing affordability is its best since 2016, and this improvement signifies an increase in the economic outlook for Australia. Let’s look at the connection between historical interest rates