Australia - Housing downturn could force earlier rate cuts

House prices are starting to fall across Australia earlier than we had anticipated. While we still expect the RBA to hike rates until early-2023, the experience from previous housing downturns points to an earlier end to the current tightening cycle. What’s more, a severe housing downturn could prompt the Bank to cut rates earlier than our current forecast of mid-2024 if inflation drops back again in earnest.