In a recent edition of Oliver’s Insights, published in April, Dr Shane Oliver discusses why the case for the RBA cutting interest rates this year has been fairly clear. He also addresses the following key points:
- A housing recovery has been a necessary aspect of rebalancing the economy through the mining bust.
- While Australian property prices are overvalued, this should not be a constraint on the RBA. He said to expect another rate cut in May (which we have just experienced) with the possibility of more to follow.
- The medium term return outlook for residential property is likely to be constrained.
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