Traders are pricing in a 60% chance of Australia’s central bank cutting rates to a record low of 2% when they announce their decision Tuesday, and the majority of economists also expect a rate cut, data compiled by Bloomberg showed.
A cut is likely in the face of the Australian dollar’s continued resilience, however one reason for caution is the strength of the housing market and the risk of a housing bubble.
Figures from CoreLogic RP Data for the week ended 22 February showed 88% of properties put up for auction had been sold, up from 78% in the prior week and near a record high. Prices in Sydney rose 13.7% on the year in February.
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