Following another interest rate hike and higher odds for more tightening, the residential property market’s recovery may be cut short.
The Reserve Bank of Australia (RBA) hiked by another 25 basis points on Tuesday, taking the cash rate to 4.1 percent, and kept its options wide open to keep going if deemed necessary.
While interest rates have still been heading up, the housing market has started recovering in a way few anticipated.
After stabilising in February, the residential property market staged a turnaround as measured by property data firm CoreLogic, with the pace of growth accelerating in May.
But the June cash rate decision and renewed determination from the RBA to do whatever is necessary to tackle inflation has SQM Research founder Louis Christopher leaning towards a “false dawn” scenario for the property market….