We expect the current housing downturn to end around the turn of the year. We think that house prices may rise by 3% from their trough in 2020 and by 5% in 2021. While rising house prices should boost consumption growth, the drag on dwellings investment and inflation may linger until mid-2020. As such, the risks to our below-consensus forecast that the RBA will slash rates to 0.75% are to the downside.
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