The downturn in the housing market means that the recent stability of the unemployment rate probably won’t last. We expect jobs growth to slow to 1% next year and the unemployment rate to creep up to 5.5% which should keep a lid on wages growth. Meanwhile, the recent decline in housing finance commitments means that housing credit growth will revisit its 2013 lows by the middle of the year. Back then, the RBA was busy cutting interest rates and we think they will do so again towards the end of the year.
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