Page 16 - Tropic Magazine Issue 35

TROPIC • REAL ESTATE

Interest in rates

PROPERTY
As the local property market
continues performing strongly,
the big question on everyone’s
lips is: When are we in for an
interest rate rise?

Words: Renee Cluff
Record fuel prices driven by the invasion
Up until February, economists had widely is adding to higher inflation, which is
agreed the Reserve Bank of Australia expected to reach at least 3.25 per cent in CAIRNS
would raise the official cash rate as early coming months. That’s above the RBA’s
as June. However, that’s looking 2-3 per cent target, or trigger to raise Rental vacancy rate

increasingly uncertain due to Russia’s 0.6%
incursion into Ukraine. the cash rate.
However, the central bank said it would
In deciding to retain the 0.1 per cent cash also like to see further annual wages
rate in March, RBA Governor Philip Lowe growth to be convinced that inflation is Median weekly rent for
said the unrest has complicated things.
over the target range. “Wages growth a 3-bedroom home
has picked up but, at the aggregate level, $477
is only around the relatively low rates
prevailing before the pandemic,” Mr Lowe Median weekly unit rent
The Board is prepared said. “We’re watching very carefully for $369
to be patient any shift in the inflation psychology.
“For many years, firms were reluctant
to put up their prices and because they
Philip Lowe didn’t want to put up their prices they Median asking property prices
Reserve Bank didn’t want to put up wages.” According to
Governor All houses
the NAB’s forecast, the first cash rate rise $523,000
will be in August, with additional rises in
“There are uncertainties about how September and November bringing the
persistent the pick-up in inflation will rate to 0.75 per cent.* All units
be given recent developments in global $270,000
energy markets and ongoing supply-side *NAB prediction accurate as of mid-March 2022
problems,” he said. Source: SQM Research/February 2022
“At the same time, wages growth MORE: rba.gov.au
remains modest.”

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16 • Tropic • Issue 35