ANZ Bank tips two RBA interest rate hikes in 2018

ANZ Bank predicts the Reserve Bank will raise official interest rates by 0.5 percentage points next year as the economy gradually improves, with the first hike tipped for May. Australia's cash rate has been at a record low of 1.5 per cent since last August, but ANZ economists David Plank and Felicity Emmett argue the data suggests "downside risks" to the economy have eased, removing the need for ultra-low rates. The economists said that if the cash rate stayed at its current low, "real" or inflation-adjusted interest rates would be negative, which was "increasingly unnecessary" in an improving economy. Even so, they predicted the RBA would tread cautiously. They forecast the cash rate will b

Apartment boom no threat to Sydney property prices

Fears an apartment glut will spark a decline in Sydney property prices are overblown, according to a senior Reserve Bank official. After a long period of under-supply, it was true that growth in the building of new Australian homes had been outpacing population growth, according to the central bank's assistant governor of economics, Luci Ellis. The Reserve Bank assistant governor of economics, Dr Luci Ellis. Photo: Ben Rushton But unlike Brisbane and parts of Melbourne – where new apartment supply had been highly concentrated in particular pockets – Sydney's apartment boom had been more evenly spread across the city, lessening the potential for price falls. "It's a truism that the more suppl


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