A cooling housing market but the RBA’s job isn’t done

Australian consumers remain deeply pessimistic, particularly about the housing market, with house price expectations falling to a three-year low and auction clearance rates continuing to weaken. Even so, we expect the housing correction to be modest and the broader economic fallout to remain limited. Meanwhile, underlying inflation pressures still appear to be building, reinforcing our view that the RBA has more work to do after next week's likely pause.