Reserve Bank of Australia Deputy Governor Guy Debelle speaks on "Housing and the Economy"
- says sizeable downturn in home building underway
- says home construction turned down sooner, by more than we expected
- says much of the downturn in construction activity is still ahead
- downturn will directly subtract around 1% point from gdp growth from peak to trough
- says effect of downturn will be somewhat larger on the economy as a whole
- says downturn dragged on small business incomes, household wealth
- together accounted for much of the slowdown in consumption growth
- says 2020 looks like being the low year for residential construction sector
- says "we can see through the trough to the other side" of the downturn
- home prices have turned in Melbourne and Sydney, investors returning to market
- rate cuts have taken account of the expected evolution of the housing cycle
- says likely to see more muted pick-up in home lending than in the past
These are not encouraging comments from Debelle. The RBA is in easing mode, expectations for the next cut seem to centre on February 2020 although with two more meetings to come this year and earlier cut has not been ruled out by markets.
Full text: Housing and the Economy
Later today we get the latest official jobs market data:
- Here is what's on the economic calendar in Asia today - AUD jobs report, RBA speaker
- Australian employment report is due Thursday - preview
- Australian jobs report is due this week - once again eyes on the unemployment rate
The RBA want the unemployment rate to move to 4.5% to spur inflationary pressures.
Yeah, 4.5%
