Authorities moving to curb demand from both domestic and foreign investors for housing. Talk of a generalised housing problem is overstated – population growth has been brisk and nationwide house prices relative to income are around their past decade average. Rising house prices are one of the few upside pressures on interest rates. Take away strong house price gains and there are plenty of reasons for the RBA to keep the cash rate at 2½% for a lot longer yet. $A is falling, as we have been expecting it would, and our AUD/USD forecast for 0.88 at end of 2014 and 0.82 for end of 2015 is unchanged.
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