Surging inflation raises RBA rate hike risk, threatening worst housing slump since 1987
Rising inflation in Australia has increased the likelihood of further interest rate hikes by the Reserve Bank, threatening to trigger the worst housing market slump since 1987. Economists warn that additional rate increases would exacerbate the current decline in national home prices.
Why it matters
The potential for a severe housing market downturn has significant implications for Australian homeowners and the broader national economy.
The threat of more interest rate hikes has created uncertainty among buyers that is contributing to falling home prices. Picture: Jane Dempster
Heartbreaking inflation figures released Wednesday could spell disaster for the Australian housing market, deepening the current downturn into the worst price slump this century.
Alarming ABS figures released Wednesday showed underlying inflation, the main metric the Reserve Bank uses to guide monetary policy, was 3.6 per cent in the year to September.
This was up from a revised figure of 3.5 per cent the month prior and well above the 2-3 per cent RBA target band, suggesting a strong case for more interest rate hikes.
Headline inflation (CPI) was 4.3 per cent, up from 4 per cent over the 12 months to August.
Headlinne story · 3 newsrooms
Australian Inflation Accelerates to 4.3 Percent Prompting Expectations of Rate Hike
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