Make no mistake, the Reserve Bank takes a great deal of time preparing financial information which it intends to deliver a specific message.
Similarly, the Reserve has on more than one occasion stressed that ,with the exception of Sydney, every major capital city (and it would seem, in the regions) has housing prices that are some way below where they were a few years ago.
Wages, on the other hand, continued to grow on average across Australia last year by 3.4%.
While the debate about the affordability of housing close to the centre of capital cities will of course drag on and on (as it has in London for decades now), the RBA’s rhetoric suggests to me that they see affordability as a non-issue right now.
Instead, the bank will sit reasonably relaxed over the coming months, with its finger poised above the ‘rate cut’ button, and will await with interest the next round of inflation data for the March quarter in 12 days time.
Most indicators seem to suggest that inflation will remain benign and well within the targeted 2-3% range.
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