As we expected, the Reserve Bank of Australia (RBA) did not reduce the exchange rate in December 2019 – this would not have been a reason for celebration. he had done it.
The cash rate is currently historically low, at 0.75%, after three rate cuts in June, July and October of this year. Until now, the economic response to the three-quarters-percent reduction in interest rates in just five months has been at best mastered.
After 12 months fairly volatile in terms of fluctuating real estate prices and consumer access to mortgage financing, some sectors of the housing market seem to react to a context of declining mortgage prices. interest rate, especially in Sydney and Melbourne.
In fact, new data from the November CoreLogic Real Estate Value Index, released on Monday, December 2, highlight the continued and rather surprising rebound in price growth. Residential real estate in Sydney and Melbourne, with the price index having risen by about 8% in both cities since June. 2019.
It is important to note that sales volumes are still declining and that this median "growth" in prices may be in part due to higher value transactions, as the lifting of the service ceiling by the company is expected. APRA has increased borrower access to funding this year.
Nevertheless, most economists and analysts expect this growth to slow down in the new year. Many also believe that, although RBA Governor Philip Lowe insisted that the federal bank had "no appetite" for quantitative easing, the bankruptcy minister said in a statement. Quantitative easing could be considered next year. QE is a process by which the central bank creates new cash to reduce or "lighten" the cost of borrowing, through a process involving the purchase of government bonds or other securities in the market in order to to increase the money supply. This encourages loans and investments, and injects cash directly into the economy.
In the future, if the rebound in real estate prices does not translate into increased consumer confidence and, therefore, an increase in consumer spending and a growing appetite for 39; invest, we could witness a further reduction in the interest rate in February or March 2020.
The case for a reduction in interest rates in February will depend on data on housing, construction and the economy published over the next two months. If recent interest rate cuts encourage consumers and this translates into big spending Christmas, it could be part of a fiscal stimulus that will move the economy. However, if consumer spending does not mitigate Reserve Bank pressures to raise the inflation rate, it may encourage them to further reduce the cash rate next year.
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Redcliffe
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Artarmon
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Thebarton
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the basin
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West Rockhampton
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