Property trends we can expect in 2022 - The “official” interest rate will remain unchanged

The official RBA interest rate is likely to remain unchanged throughout 2022.

Australia’s economy is still operating below its potential with economic growth and wages growth not strong enough to justify an interest rate increase.

Remember, current interest rates are at stimulatory levels and the Reserve Bank will only raise interest rates once these low rates have done their job and once the economy is bounding along and wages growth has remained strong for some time.

Currently, the positive signs of jobs creation, falling unemployment, and rises in full-time employment are being offset by slow wages growth; and if 200,000+ more skilled immigrants arrive in Australia as planned by the government, this will help fill the job vacancies and dampen wages growth.

However, I would not be surprised to see banks raising interest rates "out of cycle” as their cost of funds increases, as has already happened with many fixed interest rates over the last year.

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Jason Gwerder
Friday, 10 December 2021

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