Australia & New Zealand Economics Update

Rising household size will weigh on house prices

A plunge in the average household size kept housing demand strong during the pandemic even as population growth ground to a halt. RBA estimates suggest that the average household size has remained low...

18th November 2024 · 4 mins read

Australia & New Zealand Economics Update

Weakness in productivity growth partly structural

The recent weakness in productivity growth is only partly due to a cyclical hangover from the pandemic as it also reflects the structural weakness in investment. With investment growth set to remain...

7th November 2024 · 4 mins read

Australia & New Zealand Economics Update

RBA will start cutting rates early next year

Although the Reserve Bank of Australia maintained a broadly neutral stance at its meeting today, we still think it will start to lower interest rates as soon as February next year. However, with the...

5th November 2024 · 3 mins read

Australia & New Zealand Economics Update

Australia CoreLogic House Prices (Oct.)

Australia’s housing rally continued to lose steam in October. However, with the RBA set to cut interest rates from early-2025, there are good reasons not to be too bearish on the outlook for house...

31st October 2024 · 3 mins read

Event

ANZ Drop-In: Australian Q3 CPI and the timing of RBA rate cuts

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Australia is exceptional. Monetary easing cycles may be in full swing in many advanced economies, but the Reserve Bank shows no appetite to cut rates yet.

Australia & New Zealand Economics Update

Central banks will shrug off oil price risks

With the price of crude oil continuing to climb higher, we could soon see a resurgence in fuel inflation in both Australia and New Zealand. However, if we’re right that any pickup in oil prices will...

8th October 2024 · 4 mins read

Australia & New Zealand Economics Update

Off-budget boost to spending won’t last

The federal budget foresees an unusually large jump in cash outflows that don’t feed into the underlying cash balance in 2024/25. However, the actual boost to activity will be much smaller than the...

3rd October 2024 · 4 mins read

Australia & New Zealand Economics Update

RBNZ will deliver a 50bp cut next Wednesday

We expect the RBNZ to move its easing cycle up a gear and cut the Official Cash Rate by 50bp at its meeting next week. What’s more, given the Bank’s tendency to loosen policy aggressively, we think...

2nd October 2024 · 6 mins read

Australia & New Zealand Economics Update

Australia CoreLogic House Prices (Sep.)

With new listings rising rapidly, the housing market is shifting in favour of buyers. Accordingly, we think house price growth will ease further in the months ahead.

1st October 2024 · 3 mins read

Australia & New Zealand Economics Update

Surge in serviceability-exempted loans not a big threat

While banks have issued more housing loans that don’t meet APRA’s serviceability guidelines over the last couple of years, we aren’t convinced that this poses significant risks to financial stability.

30th September 2024 · 3 mins read

Australia & New Zealand Economics Update

RBA will only cut rates in first half of next year

The RBA didn’t discuss a rate hike at today’s meeting for the first time since March but reiterated its pledge that it won’t cut interest rates “in the near-term”. While the risks are starting to tilt...

24th September 2024 · 3 mins read

Australia & New Zealand Economics Update

Australia CoreLogic House Prices (Aug.)

With transaction volumes moderating and inventory rising, we expect the Australian housing market to cool in months ahead.

2nd September 2024 · 2 mins read

Australia & New Zealand Economics Update

Employment growth probably weaker than reported

We believe that employment growth isn’t as strong as the Australian Bureau of Statistics is reporting because net migration seems to have weakened more sharply than the ABS is assuming. While it will...

21st August 2024 · 5 mins read

Australia & New Zealand Economics Update

RBNZ will loosen policy aggressively

The RBNZ began its easing cycle with a 25bp rate cut at its meeting today. Although the Bank appeared to strike a cautious tone about further policy easing, we think it will cut rates more...

14th August 2024 · 3 mins read

Australia & New Zealand Economics Update

RBNZ to kickstart its easing cycle next week

We are in the minority of forecasters who expect the Reserve Bank of New Zealand to hand down a 25bp rate cut at its meeting next week. Moreover, with excess capacity in the economy rising rapidly, we...

7th August 2024 · 5 mins read