Home buyers are being warned by the Reserve Bank to prepare for more interest rate rises, saying it has to get the cost of money back to a normal level to head off inflation pressures that would leave all Australians worse off.
Lowe said home buyers, who took on record levels of debt through the Covid recession, said they should be prepared for more interest rate pain.“As we chart our way back to 2 to 3 per cent inflation, Australians should be prepared for more interest rate increases,” he said. “Many households have not previously experienced a period of rising interest rates. Households are also experiencing a decline in real incomes because of the higher inflation and some of the large gains in housing prices over recent years are being unwound.”
He said while many of Australian’s inflation pressures at present were being transmitted from overseas, there were domestic factors at play including the strong growth in domestic spending.the 2 to 3 per cent target range over time,” he said.
Supply shocks due to horrendous global political decisions are driving inflation. It is not demand driven. This should snuff itself out as consumer utility drivers adapt. But monetary tightening into credit contraction will certainly lead to a recession.
real interest rate ~ current rate - inflation rate... we are still in the NEGATIVE real interest rate... Come on RBA, you got one job ... Price control
This guesser bloke should be pruning roses. For years, his pot shots have misled the punters. Or was that his job…. ( dramatic music rising..)
Except raising rates won't curb supply induced inflation.
With the average home loan of $500K in Melbourne and $600K in Sydney I don't think he is being fully truthful of the carnage ahead.
Talk about rabbits in the headlights.
It isn't people or the RBA that are to blame but banks and credit agencies giving out loans without factoring in interest rate rises when determining loan affordability
Stop the excess government spending. Especially on non-productive purposes. Inflation is too much money chasing too few goods. Stop printing money....
And as you don’t spend your money on gaining an asset and there is inflation, you will lose 5-7% of the current value of your cash savings. Congrats millinieals we’ve managed to boot you over once again, also we’re old now can you please wipe my arse and change my adult nappy
Put the whole lot in jail. RBA, LNP, Labor, FIRB, APRA, KPMG, MSM, bankers. Jail the whole lot for what they've done to Australia.
mmm... so after 2 years of 'advising' the market and Australians that there would be no interest rate charges... the RBA finally admits they got it all wrong... so an apology is going to fix the economy now? oh no... just the suffering of individual Australians and businesses.