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House prices may rebound in early 2020

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.
Michelle Lew Administrator
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More from Australia & New Zealand

RBNZ Watch

RBNZ tightening cycle will stop by year-end

Rising interest rates are weighing on the housing market but economic activity is holding up and inflation has continued to accelerate. The upshot is that the Reserve Bank of New Zealand will hike interest rates by another 50bp at the upcoming meeting on 17th August, but we expect smaller 25bp across Q4.

10 August 2022

Australia & New Zealand Economics Weekly

RBA will press on with another 50bp hike next month

The Reserve Bank of Australia has indicated that it will slow the pace of tightening over coming months as tighter policy is starting to weigh on activity. With growth softening rather than collapsing, we’re sticking to our forecast of another 50bp hike next month, but we now expect the Bank to revert to smaller 25bp hikes during the fourth quarter.  

5 August 2022

Australia & New Zealand Data Response

International Trade (Jun. 2022)

The surge in Australia’s trade surplus to yet another record-high in June suggests that net exports will boost Q2 GDP growth by around 1%-pt though that tailwind will fade before long.

4 August 2022

More from Michelle Lew

Australia & New Zealand Economics Weekly

Labour market not as rosy as the RBA thought

The RBA has moved closer to our view that the natural unemployment may be as low as 4.0%. That means unemployment would need to fall considerably before wage pressures begin to emerge. And we think the unemployment rate is more likely to rise this year than to fall. That’s why we expect the RBA to cut rates to 0.75% before the end of the year.

14 June 2019

Japan Data Response

Machinery Orders (Apr.)

While machinery orders rose for the third straight month in April, we still expect business investment growth to slow this year as rising uncertainty over the economic outlook takes its toll.

12 June 2019

China Data Response

Trade (May)

While exports rose in May, weaker global demand and the escalating trade war suggest that they will start to fall again before long.

10 June 2019
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