Australians are being warned the country’s economy is on a “knife-edge“ after the Reserve Bank of Australia’s string of interest rate hikes, with a “consumer recession” predicted for 2023. 7NEWS
is on a “knife-edge“ after the Reserve Bank of Australia’s string of interest rate hikes, with a “consumer recession” predicted for 2023.
“Our view remains unchanged – the additional 50 basis points of increases earlier this year were unnecessary, and have prompted a further downgrade in Australia’s growth outlook,” Smith said. “At a cash rate of 3.6 per cent, most Australians will be just fine. Many, however, will not,” he added. “On these numbers, at least 300,000 Australian households may currently be experiencing negative cash flow, with mortgage repayments and essential living expenses together exceeding household disposable income,” Smith said.A rental crisis is also plaguing the country, with a “solid” acceleration in rental growth experienced across Australian states, particularly in Sydney and Melbourne, according to a Domain March 2023 Rental Report.
“Construction is expected to commence on significantly fewer houses and apartments compared to previous years – in fact, Deloitte Access Economics expects that 2023 will see construction commence on the fewest dwellings in more than a decade and almost 70,000 below the level commencements recorded in 2021.”
“In short, we are building far too few dwellings and, with a myriad of supply side challenges unresolved, that is unlikely to change in the near term.”
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