RBA Says Housing Eased More Than Expected in May as 4.4% Jobless Rate May Need to Rise
Updated
Updated · ABC News · Jul 28
RBA Says Housing Eased More Than Expected in May as 4.4% Jobless Rate May Need to Rise
3 articles · Updated · ABC News · Jul 28
Summary
May housing conditions softened more than the RBA expected, with price declines concentrated in Sydney and Melbourne after earlier cash-rate increases, policy changes and weaker sentiment.
Less than 1% of borrowers are in negative equity, and Bullock said the pullback in established home prices remains modest after a period of strong gains.
Michele Bullock also said the labour market has eased faster than expected, but more unemployment or underemployment will likely be needed to return inflation to target; the jobless rate is now 4.4%.
Headline inflation was still 4% in May, and Bullock said the RBA is prepared to raise rates further if needed as oil-price volatility and other supply shocks complicate policy.
Bullock called weak productivity growth the economy's fundamental challenge, warning it limits how fast Australia can grow without reigniting inflation.