The RBA is hurting this country more by keeping rates artificially low, it produces artificial demand for certain assets funded by unpayable debt like housing and margin loans. What the RBA says and does though is pretty much pointless now as the banks will raise rates on their own. Imo the RBA is involved in trading the aud and keeping the markets pumped up just like nearly every other CB in the world, why wouldnt the RBA be doing the same.
This is an artificial market now and make no mistake it is being done by the CB's and their allied arms.
In my area unit prices are seriously depressed and over supplied yet as I drove around the town yesterday I saw at least 10 new unit projects going up. There is not that many people in this area to warrant such a surge in unit building. Units that were 330k are now down to 300k and still not selling. I know a friend of mine has a unit for sale and she payed well over 300k but now has it for sale at 275k, fortunately this loss will not hurt her as she is fairly wealthy but vows never to get involved in units again.
No strong case to lift rates, RBA says
By Gerv Tacadena 18 JUL 2018
Despite calls from industry experts to raise interest rates, the Reserve Bank of Australia (RBA) still believes it is not yet the time to do.
In its monetary policy meeting early this month,
the central bank held interest rates at 1.5% for the 21st consecutive month, attributing its decision to global risks and the high levels of household debt in Australia.
On the domestic side, one major concern is the high level of household debt — Australia's household debt to income ratio has ballooned to a record of 190%. A trend seen in many countries over the past three decades.
“Two key drivers of this trend across countries have been the decline in nominal interest rates, predominantly reflecting lower inflation, and financial deregulation, both of which have increased households’ access to finance," the central bank said.
Read the whole article:
https://www.yourmortgage.com.au/mortgage-news/no-strong-case-to-lift-rates-rba-says/252467/
