Low cash rate setting remains major tailwind for housing values

At todays’ meeting, the RBA maintained the official cash rate target at 0.1%. The decision comes off the back of subdued inflation figures for the March 2021 quarter. Annual growth in CPI was 1.1%, below the 2-3% target band needed to tighten labour market conditions and drive wages growth. Despite a swift recovery trend in labour market conditions across Australia through the December quarter, wages growth remained low at 1.4% over the 2020 calendar year. These inflation and wages outcomes reinforce the need for the low cash rate target; likely for years to come. 

Despite sluggish performance in these economic indicators, the low cash rate setting has been a major tailwind for upward pressure on housing market values. The CoreLogic…

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