Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter

Cash rate to remain steady for 18 months: HSBC

As rate cuts earlier in the year flow through to the housing market, HSBC has suggested the cash rate will remain unchanged at two per cent for the next 18 months.

In his July 3 economic update, HSBC’s chief economist for Australia and New Zealand, Paul Bloxham, said the economy’s “rebalancing act” is continuing.

“Q1 GDP confirmed that household consumption is growing solidly, dwelling investment is in a strong upswing and resource export volumes are ramping up, as new capacity comes online,” he said.

Advertisement
Advertisement

“The lift in these areas has more than offset the drag from falling mining and public investment, leaving solid GDP growth in the first quarter, although it was still below trend over the year.”

There are also signs the Reserve Bank's February and May rate cuts have been feeding through to a further lift in housing markets, with prices rising by 9.8 per cent year-on-year in June, and building approvals reaching a new high in May.

“The clearest sign of improving conditions has been in the labour market, with jobs growth running at a three-and-a-half-year high of 2.0 per cent year-on-year in May. At this rate, jobs growth has been sufficient to keep the unemployment rate steady at 6.0 per cent to 6.2 per cent in recent months,” Mr Bloxham said.

The lift in activity and steadying of the unemployment rate are expected to keep the RBA on hold this month, Mr Bloxham said.

“If these improving trends continue, as is our central case, we expect that the RBA will not need to deliver further cuts in this easing phase,” he said.

Cash rate to remain steady for 18 months: HSBC
mortgagebusiness

 

Latest News

The chief executive of Liberty Financial has dismissed calls for a “level playing field” between banks and non-banks. ...

Australia could see double-digit growth in home values if there were to be no further rate cuts or macro-prudential curbs on residential le...

Data from the Australian Bureau of Statistics on new housing credit has shown a sharp rise in the value of home loan commitments driven by a...

FROM THE WEB
podcast

LATEST PODCAST: Best interests guidance and pre-approval suspension

Do you think the mortgage market will see more consolidation this year?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.