Australia’s consumer prices remained weak in the second quarter, leaving the central bank with scope to cut interest rates as early as next week... Improving Canberra a long time in the making...
Australian inflation remains subdued, leaving rate cut on table
(Bloomberg) -- Australia’s consumer prices remained weak in the second quarter, leaving the central bank with scope to cut interest rates as early as next week.
The Reserve Bank of Australia looks at two key measures -- trimmed mean and weighted median -- and targets an annual rate of between 2 percent and 3 percent on average. Wednesday’s report showed:
Trimmed mean CPI rose 1.7% from year ago vs median forecast of 1.5% gain Weighted median CPI climbed 1.3%, matching economist estimates Headline CPI rose 1% vs forecast 1.1% rise
“Is inflation low enough to justify market pricing and economist’s expectations for an August rate cut? The answer is a qualified yes,” said Michael Blythe, chief economist at Commonwealth Bank of Australia. “Inflation is low whichever way you cut the numbers.”
Improving Canberra a long time in the making
It was the best performing housing market over the June quarter and the current strength in the Canberra market seems to have been building for some time.
According to Domain’s June Quarter House Price Report, Canberra’s median house price increased by a nation-leading 3.1% over the three-month period to $654,306.
In the year to June, Canberra’s median house price increased 4.8%, the second best annual rate of growth behind Melbourne’s 7.4%.
Domain Group senior economist Andrew Wilson said signs point to Canberra’s house prices continuing to improve and there is a similar sentiment on the ground in the national capital.
“The strength we’re seeing started around Christmas. Usually over Christmas Canberra just closes down and is a really dead market, but last year we were still doing inspections right up to Christmas Eve for clients,” Penny Hyde, principal of Penny Hyde Buyers Agent, told MPA's sister title Your Investment Property.
