RBA Holds Steady on Rates, Bullock Addresses housing Supply

The Reserve Bank of australia (RBA) kept the cash rate unchanged following its latest monetary policy committee meeting.

During the subsequent press conference, Governor Michele Bullock acknowledged the challenging situation in the property market. However, she emphasized the RBA’s primary goal remains controlling inflation.

Bullock stated that governments are beginning too address the issue of housing supply. She cautioned, though, that significant improvements won’t happen quickly. “I’ve saeid a number of times before the problem in the housing market is a structural deficit of supply. That is the problem,” she explained.”Governments now get that, and you are seeing some action on that. But it’s going to be slow to work its way through. So it’s going to take time.”

The likelihood of substantial rate cuts diminished after the RBA’s proclamation. Financial markets now estimate a 40 percent chance of the cash rate reaching 3.35 percent by the end of the year.

Governments are taking action to lift supply, but the effects will take years to materialize.