Falling house prices could slow the overall economy, Reserve Bank governor Philip Lowe has conceded | swrighteconomy
Falling house prices could slow the overall economy, Reserve Bank governor Philip Lowe has conceded while arguing there were still positive signs a strong jobs market will underpin the nation over the next year.
"Over recent years, spending by households has risen at a faster rate than household income; in other words, the saving rate has declined," he said. The RBA left official interest rates at 1.5 per cent at its March board meeting on Tuesday. Financial markets believe the bank will be forced into cutting rates at least once in the next 12 months.
"This is similar to the picture internationally. In a number of countries, including our own, there is growing tension between strong labour market data and softer GDP data. We are devoting significant resources to understanding this tension."
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