Why the RBA cares about house prices and how it affects interest rates

The majority of countries in the world have a central bank whose role is to maintain economic stability by managing the currency and interest rates, and issuing bank notes. In Australia, this institution is known as the Reserve Bank of Australia, also referred to as the RBA or the Reserve Bank. On the first Tuesday of every month, except for January, the RBA board meets to determine whether it should change the official cash rate. The result usually makes headlines […]

CBA: Victoria’s tax on vacant homes may be a blueprint for other cities in Australia

Following in the footsteps of policymakers in Vancouver, the Victorian government announced yesterday that it will introduce a 1% “Vacant Residential Property Tax” from January 1 next year, designed to raise revenue from investors who choose not to occupy or rent out a vacant dwelling. It will be based on the improved value of a taxable property, and will target homes around the inner and middle suburbs of Melbourne. For an investor with a vacant property worth $500,000, the tax […]

Australian dollar sheds more than 1pc amid resurgent greenback

The Australian dollar has plunged below the US76¢ mark amid a resurgence in its US counterpart as expectations the Federal Reserve will lift interest rates later this month continues to ratchet higher. Governor Lael Brainard, seen as among the most dovish policymakers, has added her voice to the debate, saying the economy “appears” to be at an inflection point. “We are closing in on full employment, inflation is moving gradually toward our target, foreign growth is on more solid footing, […]

Millennials need the ‘Bank of Mum and Dad’ for more than just housing

IT LOOKS like a home isn’t the only thing struggling millennials might miss out on if they can’t rely on help from the ‘Bank of Mum and Dad’. And it’s all thanks to rising house prices. New research from the Australian Housing and Urban Research Institute (AHURI) by researchers from RMIT University and Curtin University has shown a correlation between university education and intergenerational wealth transfers through housing. The report, A new look at the channels from housing to employment […]

Melbourne property prices: The top school zones for house price growth

School catchment zones have become an increasing concern for Melbourne buyers as the city’s population continues to balloon and place further pressure on enrolment limits. And it is now getting even tougher for Melbourne parents to afford to get their children within certain zones, with the city leading the country in terms of house price growth per school catchment. Some popular schools zones have outpaced city-wide averages by more than double, an analysis of the top school zones for price growth […]