RBA Holds Rate at 4.35%, Says 20% Home Price Fall Would Not Threaten Stability
Updated
Updated · Sydney Morning Herald · Aug 11
RBA Holds Rate at 4.35%, Says 20% Home Price Fall Would Not Threaten Stability
3 articles · Updated · Sydney Morning Herald · Aug 11
Summary
Michele Bullock said the RBA could still raise rates after unanimously holding the cash rate at 4.35%, with no rate cut discussed and inflation still seen above target until end-2027.
3.8% inflation in June came in below the RBA’s May forecast of 4.8%, but the bank said oil-supply disruption from the Iran war and strong business investment are keeping price pressures alive.
Data-centre construction was singled out as an inflation risk, with Bullock warning the AI boom could strain already tight construction capacity before any productivity gains arrive.
A 20% housing-price drop would leave only about 5% of households in negative equity, Bullock said, arguing that would hurt owners but not endanger well-capitalised banks.
ANZ now expects capital-city prices to fall 10.6% from peak to trough, including a 14.5% slide in Sydney, as restrictive rates, tax changes and weak affordability cool the market.