What the Experts Say About the Recent RBA Update

On Tuesday, the RBA decided to keep their interest rates on hold. So what does this mean? Here is a recap of what the experts had to say about the recent update.

Tim Lawless:

August data showed CoreLogic’s national index recorded its first month on month rise since October 2017 and five of the eight capital cities saw dwelling values increase.

Clearly housing market conditions are responding to lower interest rates as well as the recent loosening of loan serviceability rules from APRA and the positive influence of the stable federal election outcome.

High levels of household debt are manageable while interest rates are very low, however if debt levels remain elevated when interest rates eventually rise, the risk is that households will need to dedicate more of their income towards servicing their debt and less towards spending.


Economic growth in Australia over the first half of this year has been lower than earlier expected, with household consumption weighed down by a protracted period of low income growth and declining housing prices and turnover.

Looking forward, growth in Australia is expected to strengthen gradually to be around trend over the next couple of years.

The outlook is being supported by the low level of interest rates, recent tax cuts, ongoing spending on infrastructure, signs of stabilisation in some established housing markets and a brighter outlook for the resources sector.


Macquarie has adjusted its thinking and now sees the likelihood of an interest rate cut in October rising, followed by another in November.

In Australia the mixed signals from economic data weighs more heavily to the downside, however in our view the RBA will wait for the second quarter GDP growth number, which is released after this month’s board meeting, before acting.

The RBA has downgraded its growth forecast to 2.5% but have maintained a 2020 growth rate forecast of 2.75%.

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