Barclays: House prices to trigger early rate hike

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The AFR has some Kouky reading from Kieran Davies, chief economist at Barclays Bank Australia:

“The RBA now seems less comfortable. That said, the governor still seems sceptical of macro-prudential policy, suggesting that ‘prolonged use’ of prudential tools indicates that interest rates are too low…The Sydney housing market is the canary in the coalmine for the RBA, with Sydney house prices growing at an annualised rate of 20 per cent and investors now accounting for a record 54 per cent of new home loans written each month in NSW.”

I will believe it when I see it.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.