Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Sunday, 12 February 2017

3 insights from the SOMP


The Reserve Bank of Australia (RBA) released its Statement on Monetary Policy for February 2017.

Lots to digest as usual!

Firstly, and probably the most interesting part, I thought, was the section concerning inflation forecasts. 

The RBA sees inflation returning to the 2 to 3 per cent target range, and as such interest rates are now likely to be on hold unless the labour market deteriorates from here.

Secondly, it also looks as though forecasts for growth in the economy are quite upbeat, tracking at around 3 per cent in 2017/18 and 3 per cent in 2018/19, before potentially rising further. 

Finally, housing.

There was lots to look at in terms of housing markets, although nothing particularly ground-breaking. 

Rental price growth is soft, apartment approvals are falling sharply, and turnover in the housing market is well below the average since 2008, reflecting low levels of stock on the market.

On another related point, it's interesting to see that after copping a huge amount of heat for possibly 'overstating' dwelling price growth, CoreLogic's index has now seen other data providers catch up towards a similar rate of growth.