If you need a reliable, accurate, thought provoking and informed economic forecasting at both local and international levels, look no further. Informed by Stephen's exceptionally broad experience and background, his
The RBA rear view mirror analysis of house prices is very confusing. Earlier in the year when it could have gotten away with an interest rate hike to cool housing (among other things), it mentioned house price growth without a hint of concern. This was when house prices were running rampant.
Now, six months later, when there are clear signs of a moderation or cooling in house prices, the Minutes of the September RBA Board meeting noted "housing prices had been rising at a rapid pace" and that "Members further observed that additional speculative demand could amplify the property price cycle".
The odd thing with the RBA about-face is that house prices are now the weakest they've been in several years.
According to the RPData house price series, in the four and half months since the end of April, house prices have risen by just 1.6 per cent, which is an average monthly pace of 0.35 per cent or an annual rate at a very comfortable 4.25 per cent.
When I was travelling on the Ghan railway between Adelaide and Alice Springs, I shared a cabin with an odd chap called Scott.
Scott was paranoid about being eaten by tigers and dragons. He had heard from some of his mates that there had been sightings of such dangerous beasts in central Australia in recent months.
It was an odd paranoia, I know, but Scott seemed adamant that on this journey, either a tiger or a dragon would somehow get on to the train and eat him.
Scott sat down, reached into his bag and pulled out a clock and a ream of blue A4 paper. The train left Adelaide on time. Scott was staring at his clock and after 5 minutes, he jumped up out of his seat, screwed up a piece of blue paper and threw it out the window.