Guy Debelle, Assistant Governor (Financial Markets) at the Reserve Bank of Australia is speaking on “Housing and the Economy” in Sydney and has said a sizeable downturn in home building is underway.
Says home construction turned down sooner, by more than we expected.
Says much of the downturn in construction activity is still ahead.
Downturn will directly subtract around 1% point from gdp growth from peak to trough.
Says effect of downturn will be somewhat larger on the economy as a whole.
Says downturn dragged on small business incomes, household wealth.
Together accounted for much of the slowdown in consumption growth.
2020 looks like being the low year for residential construction sector.
"we can see through the trough to the other side" of the downturn.
Home prices have turned in melbourne and sydney, investors returning to market.
Rate cuts have taken account of the expected evolution of the housing cycle.
Says likely to see more muted pick-up in home lending than in the past.
Guy Debelle is the Assistant Governor (Financial Markets) at the Reserve Bank of Australia, a position he has held since March 2007. In that role, he has oversight of the Bank's operations in the domestic and global financial markets, including the management of Australia's foreign reserves. He briefs the Reserve Bank Board on developments in financial markets at the monthly Board meetings and participates as the Bank's representative in a number of global fora, including the BIS Committee on Global Financial Stability.
AUD/USD has been taken for a ride of late due to US/China trade war headlines as well as sentiment surrounding the RBA and their next move.
"Markets are pricing 10bp of easing at the 5 Nov RBA meeting, and a terminal rate of 0.44% (RBA cash rate currently at 0.75%)," analysts at Westpac explained
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.