The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

&nbsp;

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Joel Robinson

Every First Home Owner Grant for new property by state

Sales have launched at Hali Dromana, the rare beachside townhouse development by Samuel Property on the Mornington Peninsula.

Samuel Property, led by Illan Samuel, once again partnered with the architectural excellence of Cera Stribley, one of Melbourne's most sought-after architecture firms, to design the 70 three and four-bedroom townhouses. The two worked together on Louise, Samuel's other development just off St Kilda Road.

Samuel says <a href="https://www.urban.com.au/new-townhouses/hali-dromana-105-111-point-nepean-road-dromana-vic-3936">Hali Dromana</a> is a homage to the beloved 1960s holiday home where Australian summers were defined.

"Hali will give <a href="https://www.urban.com.au/developments/dromana-vic-3936">Dromana</a> a fresh identity that will stand the test of time," Samuel says.

[smartcode_project:default project_id=147112 project_image_fid=330350]

There have been three distinct buyer groups since the project launched, according to Blair Property Group Director Darren Blair.

The most active group has been those who already live on the Mornington Peninsula and are looking for lower-maintenance living, closer to the beach.

"These buyers have been locals for years, whether from Rosebud, Safety Beach, or Red Hill," Blair says.

"They want to rid themselves of maintaining a 1,000-plus sqm block and downsize to something brand new, closer to the beach. They're approaching retirement and want a more connected, lock-up-and-leave lifestyle—they don't want to get in their car and drive to the beach anymore."

[smartcode_project:default project_id=147112 project_image_fid=330358]

There's also been interest from those living in Melbourne's affluent eastern suburbs, who are planning for both a weekender and, potentially, a future beachside retirement home.

"These buyers will likely rent the home in the short to medium term and use it as their weekender throughout the year, but they're buying for a future permanent bolthole on the Mornington Peninsula."

What’s notable is that most of those who have shown interest have a significant connection to Dromana, Blair says.

"They either holidayed or grew up in Dromana as children, and they have historic ties to the area. Hali gives them the opportunity to buy something of this quality, which was previously unavailable anywhere on the Mornington Peninsula."

Samuel recently secured the permit for the near two-hectare block that was formerly the Kangerong Holiday Park. The few buildings that were on the prime site have started to be demolished, and civil works on the land will begin in the coming months. Completion of Hali is slated for mid-2027.

Buyers are already walking through the display suite at 9 Pier Street, 700m from Hali.

[smartcode_project_cta:default project_id=147112]

Buyers are already walking through the display suite at 9 Pier Street, 700m from Hali

Hali Dromana strikes a chord with locals and Melbourne buyers looking for low maintenance beachside living

The European origins of the Hunter Valley date back to the early 1820s when the first small vineyard plots of about 20 acres were planted on the northern banks of the Hunter River trade route. Fast forward over two centuries and the Hunter Valley has grown to become one of the most popular regional destinations for foodies, wine lovers and golfers.

Despite the high level of interest in both living and visiting the Hunter Valley,&nbsp; development of new residential offerings has been limited. The Hunter Valley is traditionally known for its charming country homes, many of which have been in place for over a century and sit on larger rural blocks of land.

<a href="https://www.urban.com.au/new-townhouses/lovedale-farm-1184-wine-country-drive-lovedale-nsw-2325">Lovedale Farm</a>, the new residential, resort, and golf community from Capital Corporation, brings a new residential offering to those seeking the Hunter Valley lifestyle. The opportunity has not been lost on those from Sydney and Newcastle, who have already snapped up over 60 per cent of the first release.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/eUNxE5XQX8w?si=deCOe1eLBXwFfvFA" title="YouTube video player"></iframe>

In the heart of the Hunter Valley between Pokolbin and Rothbury, Lovedale Farm is a masterplanned golf development that will span an almost unrepeatable 240 hectares.

Every detail has been designed to be in keeping with the character of the local region, from half of the site being dedicated to green open spaces, bush restoration and recreation, to the design of three and four-bedroom residences, crafted as a rural retreat for 21st-century living.&nbsp;

[smartcode_project:default project_id=14476 project_image_fid=334210]

<a href="https://www.urban.com.au/developers/capital-corporation">Capital Corporation</a> has worked hand in hand with Cessnock Council and NSW Government for the best part of two decades to realise the vision for Lovedale Farm.&nbsp; The first release of residences will be accompanied by an 18-hole golf course designed by Darius Oliver, the designer known for projects like Cape Wickham on King Island.&nbsp; The masterplan includes a wider residential community, a boutique, high-end resort, destination dining precinct and apartments.&nbsp;&nbsp;

Buyers now have the chance to secure a slice of Lovedale Farm. Lot sizes range from 550 sqm up to 3,000 sqm. Prices for turnkey residences start from $1.35 million for three-bedroom homes on 550 sqm lots, lower than Sydney’s median house price of around $1.4 million.

The residences have been custom-designed exclusively for the development, balancing contemporary architecture with the traditional character of the Hunter Valley, with landscaping by Moir Studio.

[smartcode_project:default project_id=14476 project_image_fid=334207]

The golf-first design principle ensures the course remains a focal point, with a British heathland-style layout providing both strategic play and scenic views. Complementing the community will be an epicurean dining precinct featuring farm-to-table dining and a mix of local producers. The boutique resort will include luxury amenities such as a swimming pool, fitness facilities, and leisure spaces.

With seven kilometres of walking trails and a landscape inspired by the area’s natural beauty, Lovedale Farm is designed to provide both residents and visitors with an authentic rural lifestyle experience.

[smartcode_project:default project_id=14476 project_image_fid=334206]

Capital Corporation is officially unveiling its display suite at nearby Hunter Valley Gardens on March 15. The event, Gather on the Green, will feature local food, wine, and entertainment.&nbsp;

Capital Corporation has an enviable track record for creating large-scale, masterplanned communities across urban regeneration and greenfield sites. They’ve been behind the development of Woolooware Bay Town Centre at Cronulla Sharks Shark Park.&nbsp; More recently they are working on a multi-stage development in Wahroonga, <a href="https://www.urban.com.au/new-apartments/the-residences-at-wahroonga-estate-169-fox-valley-road-wahroonga-nsw-2076">The Residences</a>, which will bring the first-ever large-scale development to the popular Upper North Shore suburb.

Last year they completed The Bond, working in tandem with the Bondi Junction RSL Club to develop 80 high-end apartments above a brand new RSL Club on Gray Street Bondi Junction.

[smartcode_project_cta:default project_id=14476]

Inside Lovedale Farm, Hunter Valley’s newest landmark destination

There's no slowing down the popular, design-driven Melbourne apartment developer Milieu.

Currently working on <a href="https://www.urban.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick">Elsternwick Gardens</a>, a garden community in Elsternwick, and nearing completion of the <a href="https://www.urban.com.au/new-apartments/plant-street-by-milieu-malvern-1-plant-street-malvern">Plant Street Malvern project</a> later this year, Milieu is preparing to launch its sixth project in <a href="https://www.urban.com.au/new-apartments/brunswick-vic">Brunswick</a> project, one of Melbourne's trendiest suburbs.

The developer has secured approval for a nine-level, mixed-use development on the corner of Dawson and Saxon Street, just off Sydney Road and next to the famous Brunswick Baths.

[smartcode_project:default project_id=136434 project_image_fid=306343]

The new project, to be known as <a href="https://www.urban.com.au/new-apartments/saxon-street-by-milieu-10-dawson-street-brunswick">Saxon Street by Milieu</a>, will provide much-needed housing stock to the area, with apartments to be incorporated into the Jackson Clements Burrows Architect-designed building located in Brunswick’s Major Activity Centre.

The new building, with 78 apartments, will replace The Brosnan Centre, on an irregular shaped, but prime 1,764 sqm site in an area known as the civic and cultural epicentre of Brunswick, also adjoining councils brand new arts precinct known as Balam Balam Place.

<img alt="Milieu Brunswick" data-entity-type="file" data-entity-uuid="b172aa05-75e1-4ec0-9494-1f94615a0847" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202024-03-15%20at%202.09.49%20pm.png?VersionId=SOFldlPMDi.4ZIaJUw5OT4.60qGHee6s" />An image from the town planning submission: Image Credit: JCB Architects

The gas-free building will be made up a diverse mix of one, two and three-bedroom apartments&nbsp;over two levels of basement bar parking.

Milieu says&nbsp;the design, which includes landscaping by Oculus and interiors by Design Office, centres on sustainable initiatives that will reduce the cost of living.

"Designed with the future in mind, this project has been considered for its positive impact on the local community," Milieu says.

"Alongside the homes, the project will enhance the precinct through substantial improvements to public infrastructure and pedestrian access."<img alt="Milieu" data-entity-type="file" data-entity-uuid="887fd8f0-c41d-4157-bfc5-e35874f6a56b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202024-03-15%20at%202.10.01%20pm.png?VersionId=lkLmPhE6jcSq60dAZS3Yy5bPPzOx3aEa" />An image from the town planning submission: Image Credit: JCB Architects

The developer, founded in 2010 and led by Michael McCormack and Shannon Peach, said the&nbsp;Merri-bek Arts and Culture Precinct&nbsp;continues to evolve, fostering the arts and promoting health and wellness throughout the area.

In the design documents submitted to the Merri-Bek Council, JCB said the proposed building serves to sites neighbouring architectural heritage and substantially improve the public realm.

"Informed by neighbouring arched windows, a curved language is introduced to canopies, floor plate edges and parapets. This language is then exaggerated with introduction of semi-circular protruding balconies contrasting with the building’s otherwise rational façade."

<img alt="Milieu" data-entity-type="file" data-entity-uuid="ee02a473-0e3b-47cb-b302-7f3e0868e245" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202024-03-15%20at%202.10.13%20pm.png?VersionId=ffuDtieMREIweTkVklIknTIaNsBD8vcT" />An image from the town planning submission: Image Credit: JCB Architect 
 
JCB said a&nbsp;key move made to improve the precinct is a 3.7-metre ground plane setback from Saxon Street widening an existing compromised narrow footpath.

"This significant urban gesture strengthens the physical connection between Dawson Street and Siteworks, a key Merri-bek cultural amenity," they said.

Saxon Street by Milieu is expected to launch in the coming months.

[smartcode_project_cta:default project_id=136434]

Exclusive: Milieu secures approval for new Brunswick apartment project, Saxon Street by Milieu

Brisbane's unit market continues to see impressive growth in 2025.

After reaching a four-decade high in 2024, with a remarkable 16.6 per cent growth—the highest calendar year increase since the mid-1980s—Brisbane units have sustained their momentum.

According to CoreLogic's latest Home Value Index, unit values rose by 0.7 per cent in February, making it the second-best performing capital city unit market. This follows strong growth of 0.6 per cent in January and 0.8 per cent in December, demonstrating consistent upward movement.

The median unit price in Brisbane is now approaching $700,000, up from $568,000 at the start of 2024.

Unit values have consistently outpaced house prices, with house values remaining flat in February.

Brisbane’s performance aligns with broader national trends. While many capital cities began experiencing negative growth in the latter part of 2024, the February interest rate cut has reignited demand, reversing some of these declines.

<h2>What happened in Brisbane’s off the plan apartment market in February? &nbsp;</h2>

A major policy shift was announced in February that will significantly impact Brisbane’s new apartment market.&nbsp;

The Queensland Government revealed that first home buyers purchasing a new property will no longer have to pay stamp duty, removing a major upfront cost that has long been a barrier to homeownership. &nbsp;

The policy aims to increase home ownership rates in Queensland, which have been at their lowest in the country over the past decade.&nbsp;

The move is also expected to provide a boost to new apartment sales, particularly in Brisbane, where demand from first home buyers is strong. &nbsp;

Read more:&nbsp;<a href="https://www.urban.com.au/news/qld/first-home-buyers-to-pay-no-stamp-duty-on-new-property-in-qld-gov-shakeup">First home buyers to pay no stamp duty on new property in QLD Gov shakeup</a>

February saw Sekisui House Australia reveal Callista on Park, the final stage in their thriving West Village precinct.

After nearly a decade of transforming the former Peter's Ice Cream Factory site in Brisbane's West End,&nbsp;<a href="https://www.urban.com.au/developers/sekisui-house-australia" target="">Sekisui House</a>&nbsp;Australia has&nbsp;unveiled the final opportunity to buy into the thriving West Village community.

[smartcode_project:default project_id=134800 project_image_fid=330238]

<a href="https://www.urban.com.au/architects/rothelowman">Rothelowman</a>&nbsp;has designed&nbsp;<a href="https://www.urban.com.au/new-apartments/callista-on-park-west-end-49-mollison-street-west-end">Callista on Park</a>, a mix of two, three and four-bedroom apartments across a 14-level building.

The plans were rejigged to shift the majority of the building amenity to the roof, giving future Callista residents a rooftop retreat with extensive views of the Brisbane CBD skyline.

[smartcode_project:default project_id=134800 project_image_fid=330244]

The name Callista on Park has European origins. "Callista," meaning "most beautiful" in Greek, honors the West End area's strong Greek community from the 1980s. It signifies "most beautiful" because it represents West Village’s most premium offering. "On Park" reflects its prime location, fronting Mollison Park, a central green space that hosts events such as the annual Brisbane Ice Cream Festival, pizza and pinot evenings, gardening workshops, and fashion events. It is also situated next to the historic Peters Ice Cream building, home to West Village’s popular farmers market.

Read more:&nbsp;<a href="https://www.urban.com.au/news/qld/west-village-final-stage-revealed-as-callista-on-park-launches-to-the-market">West Village final stage revealed as Callista on Park launches to the market</a>

The demand for more premium apartments in Brisbane has also been evident in <a href="https://www.urban.com.au/developments/toowong-qld-4066">Toowong</a> where <a href="https://www.urban.com.au/developers/consolidated-properties">Consolidated Properties</a> has secured the majority of sales of its penthouse collection at&nbsp;<a href="https://www.urban.com.au/new-apartments/monarch-residences-toowong-600-coronation-drive-toowong">Monarch Residences</a>.

Just two penthouses and a river home are left in the riverfront development after nearly $50 million in penthouse sales. The majority of buyers have been local downsizers.

[smartcode_project:default project_id=113455 project_image_fid=302322]

The final remaining residences, priced from $4.4 million in Monarch which is currently under construction through Hutchinsons and will be completed by the end of the year.

Read more:&nbsp;<a href="https://www.urban.com.au/news/qld/penthouses-snapped-up-at-toowongs-monarch-residences">Penthouses snapped up at Toowong's Monarch Residences</a>

City Beat February 2025: Brisbane unit market outperforms houses as government abolishes stamp duty for first home buyers

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

The following is the statement provided by Michele Bullock which can be <a href="https://www.rba.gov.au/media-releases/2023/mr-23-35.html">found here</a>.

At its meeting today, the Board decided to leave the cash rate target unchanged at 4.35&nbsp;per&nbsp;cent and the interest rate paid on Exchange Settlement balances unchanged at 4.25&nbsp;per&nbsp;cent.

Last month, the Board increased interest rates by 25&nbsp;basis points, following a period of four months where it had held interest rates steady. This decision reflected the Board’s view that progress in bringing inflation back to the target range of 2&nbsp;to 3&nbsp;per&nbsp;cent was looking slower than earlier forecast. While the economy has been experiencing a period of below-trend growth, it was stronger than expected over the first half of the year. Underlying inflation was higher than expected at the time of the August forecasts, including across a broad range of services. Conditions in the labour market had eased but remained tight. Housing prices were continuing to rise across the country as was the number of new mortgages. Given this, the Board judged that the risk of inflation remaining higher for longer had risen and an increase in interest rates was therefore warranted to be more assured that inflation would return to target in a reasonable timeframe.

The limited information received on the domestic economy since the November meeting has been broadly in line with expectations. The monthly CPI indicator for October suggested that inflation is continuing to moderate, driven by the goods sector; the inflation update did not, however, provide much more information on services inflation. Overall, measures of inflation expectations remain consistent with the inflation target. Wages growth picked up in the September quarter but this was expected given that it captured the earlier Fair Work Commission decision on award wages. Wages growth is not expected to increase much further and remains consistent with the inflation target, provided productivity growth picks up. Conditions in the labour market also continued to ease gradually, although they remain tight.

Higher interest rates are working to establish a more sustainable balance between aggregate supply and demand in the economy. The impact of the more recent rate rises, including last month's, will continue to flow through the economy. High inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment. Holding the cash rate steady at this meeting will allow time to assess the impact of the increases in interest rates on demand, inflation and the labour market.

Returning inflation to target within a reasonable timeframe remains the Board’s priority. High inflation makes life difficult for everyone and damages the functioning of the economy. It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and worsens income inequality. And if high inflation were to become entrenched in people’s expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment. To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.

There are still significant uncertainties around the outlook. While there have been encouraging signs on goods inflation abroad, services price inflation has remained persistent and the same could occur in Australia. There also remains a high level of uncertainty around the outlook for the Chinese economy and the implications of the conflicts abroad. Domestically, there are uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages will respond to the slower growth in the economy at a time when the labour market remains tight. The outlook for household consumption also remains uncertain, with many households experiencing a painful squeeze on their finances, while some are benefiting from rising housing prices, substantial savings buffers and higher interest income.

Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.

Urban Editorial

RBA keeps rates on hold at final meeting of 2023

The full statement from the Reserve Bank of Australia on its November Cup Day rate hike

At its meeting today, the Board decided to raise the cash rate target by 25&nbsp;basis points to 4.35&nbsp;per&nbsp;cent. It also increased the interest rate paid on Exchange Settlement balances by 25&nbsp;basis points to 4.25&nbsp;per&nbsp;cent.

Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago. The latest reading on CPI inflation indicates that while goods price inflation has eased further, the prices of many services are continuing to rise briskly. While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected. CPI inflation is now expected to be around 3½&nbsp;per&nbsp;cent by the end of 2024 and at the top of the target range of 2&nbsp;to 3&nbsp;per&nbsp;cent by the end of 2025. The Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.

The Board had held interest rates steady since June following an increase of 4&nbsp;percentage points since May last year. It had judged that higher interest rates were working to establish a more sustainable balance between supply and demand in the economy. Furthermore, it had noted that the impact of the more recent rate rises would continue to flow through the economy. It had therefore decided that it was appropriate to hold rates steady to provide time to assess the impact of the increase in interest rates so far. In particular, the Board had indicated that it would be paying close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market.

Since its August meeting, the Board has received updated information on inflation, the labour market, economic activity and the revised set of forecasts. The weight of this information suggests that the risk of inflation remaining higher for longer has increased. While the economy is experiencing a period of below-trend growth, it has been stronger than expected over the first half of the year. Underlying inflation was higher than expected at the time of the August forecasts, including across a broad range of services. Conditions in the labour market have eased but they remain tight. Housing prices are continuing to rise across the country.

At the same time, high inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment. Given that the economy is forecast to grow below trend, employment is expected to grow slower than the labour force and the unemployment rate is expected to rise gradually to around 4¼&nbsp;per&nbsp;cent. This is a more moderate increase than previously forecast. Wages growth has picked up over the past year but is still consistent with the inflation target, provided that productivity growth picks up.

Returning inflation to target within a reasonable timeframe remains the Board’s priority. High inflation makes life difficult for everyone and damages the functioning of the economy. It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and worsens income inequality. And if high inflation were to become entrenched in people’s expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment. To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.

There are still significant uncertainties around the outlook. Services price inflation has been surprisingly persistent overseas and the same could occur in Australia. There are uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages will respond to the slower growth in the economy at a time when the labour market remains tight. The outlook for household consumption also remains uncertain, with many households experiencing a painful squeeze on their finances, while some are benefiting from rising housing prices, substantial savings buffers and higher interest income. And globally, there remains a high level of uncertainty around the outlook for the Chinese economy and the implications of the conflicts abroad.

Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.

Source: <a href="https://www.rba.gov.au/media-releases/2023/mr-23-30.html">www.rba.gov.au</a>

At its meeting today, the Board decided to raise the cash rate target by 25 basis points to 4.35 per cent

RBA hike interest rates at Cup Day meeting

Property values across the country continued to decline over November, research from property data firm CoreLogic found, but there was a further ease in the speed of the declines.

Dwelling values (which incorporates both houses and units), contracted a further one per cent in November, driven by declines in Hobart (-2 per cent), Canberra (-1.2 per cent), and Sydney (-1 per cent).

Capital city housing markets declined -1.2 per cent, with Brisbane (-2.2 per cent), Hobart (-2 per cent) and Sydney (-1.5 per cent), feeling the declines the hardest.

Capital city units however dropped just -0.6 per cent. Hobart (-1.8 per cent), Sydney (-0.9 per cent) and Canberra (-0.8 per cent) the capital's the most affected in the unit market.

Declines however have continued to soften since August when the national index dropped by -1.6 per cent.

CoreLogic Research Director Tim Lawless said the easing in the rate of decline is mostly emanating from the Sydney and Melbourne markets, but is also evident across many of the smaller capitals and most regional markets.&nbsp;

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 per cent. That has now reduced by a full percentage point to a decline of -1.3 per cent in November," Lawless said.&nbsp;

"In July, Melbourne home values were down -1.5 per cent over the month, with the monthly decline almost halving last month to -0.8 per cent.

“The rate of decline has also eased across the ACT (from a -1.7% fall in August), and is no longer accelerating in Brisbane. Most of the broad rest-of-state markets have also seen the pace of declines decelerate."

Lawless said that it is possible we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls. He does however note that housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.

“There is still the possibility that the pace of declines could reaccelerate, especially if the current rate hiking cycle persists longer than expected.

"Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire."

<h2>Melbourne Market Snapshot</h2>

<ul>
	<li>Unit values across Melbourne dropped just -0.2 per cent across November, the lowest declines the Victorian capital has seen since May. 
	&nbsp;</li>
	<li>It's stark comparison to the housing market, which dropped another -1 per cent.</li>
</ul>

[smartcode_project:default project_id=112174 project_image_fid=199593]

<ul>
	<li>Unit values are now -4.1 per cent down over 2022, almost half the declines felt in the housing market, now -8.1 per cent since the turn of the year. 
	&nbsp;</li>
	<li>The median Melbourne unit value is now $597,000, and houses $759,000.</li>
</ul>

<h2>Sydney Market Snapshot</h2>

<ul>
	<li>Unit values across Sydney dropped just -0.9&nbsp;per cent across November, the third highest of all the capital city markets. 
	&nbsp;</li>
	<li>Sydney houses dropped another -1.5 per cent in November.</li>
</ul>

[smartcode_project:default project_id=22748 project_image_fid=204929]

<ul>
	<li>Unit values are now -8.2 per cent down over 2022, which is double the declines in Melbourne. Houses in the Harbour capital are down -11.9 per cent in the same period. 
	&nbsp;</li>
	<li>The median Sydney unit value is now $781,000, and houses $1,025,000.</li>
</ul>

<h2>Brisbane Market Snapshot</h2>

<ul>
	<li>Brisbane had the biggest divergence between the house and unit market in November 
	&nbsp;</li>
	<li>Unit values across Brisbane dropped just -0.2&nbsp;per cent across November, the third best performing unit market across the capitals. 
	&nbsp;</li>
	<li>Brisbane houses however were the worst performer, down -2.2 per cent</li>
</ul>

[smartcode_project:default project_id=102309 project_image_fid=163977]

<ul>
	<li>The Brisbane unit market has been one of the biggest success stories of 2022, bucking the trend of the downturn. Values are still 7.1 per cent higher than they were at the start of the year. 
	&nbsp;</li>
	<li>The Brisbane house market has also remained resilient, just ticking into negative territory, down -0.8 per cent this year. 
	&nbsp;</li>
	<li>The median Brisbane unit value is now $492,000, and houses $798,000.</li>
</ul>

CoreLogic Research Director Tim Lawless said the easing in the rate of decline is mostly emanating from the Sydney and Melbourne markets

Property downturn continues, but rate of decline softens again: CoreLogic

The RBA has hiked rates for the sixth month in a row, with the Tuesday meeting seeing rates rise by 0.25 per cent.

Three of the big four banks expected a half a percentage point rise, with just Commonwealth Bank predicting the 25 basis point rise.

The official cash rate is now at 2.6 per cent.

The RBA noted in their statement that, as is the case in most countries, inflation in Australia is too high.

"Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role," RBA Governor Philip Lowe noted in the announcement.

The RBA predicted a further increase in inflation over the months ahead, before it then declines back toward the two to three per cent range.

"The expected moderation in inflation next year reflects the ongoing resolution of global supply-side problems, recent declines in some commodity prices and the impact of rising interest rates.

"Medium-term inflation expectations remain well anchored, and it is important that this remains the case. The Bank’s central forecast is for CPI inflation to be around 7¾ per cent over 2022, a little above 4 per cent over 2023 and around 3 per cent over 2024."

As for mortgages, Lowe noted that higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments.

"Consumer confidence has also fallen and housing prices are declining after the earlier large increases.," Lowe suggested.

"Working in the other direction, people are finding jobs, gaining more hours of work and receiving higher wages. Many households have also built up large financial buffers and the saving rate still remains higher than it was before the pandemic."

Graham Cooke, head of consumer research at Finder, said Aussies with a $500,000 mortgage will be paying almost $9,000 more a year in interest compared to just six months ago.

“Australians with a $500,000 mortgage will be forking out $735 more per month compared to what they were paying in April.&nbsp; 
 
“That’s a whopping amount of extra money to pay every month – especially when everyday items like groceries and petrol are skyrocketing in price."

The RBA noted in their statement that, as is the case in most countries, inflation in Australia is too high.



RBA hike interest rates by 0.25 per cent, points to high inflation

Affordability issues appeared to have curbed borrowing activity of first home buyers and owner occupiers, but not investor loans in September, according to the latest Australian Bureau of Statistics data.

The value of new home loans dropped for the second month in a row.

In September, $30 billion of new mortgages were settled, down 1.4 per cent from August, in seasonally-adjusted terms.

Owner-occupier lending dropped 2.7 percent from August.

Investor lending continued to climb, reaching its highest level since April 2015 with $9.62 billion in loans settled in September, up 1.4 per cent month-on-month.

Increased investor loan commitments were seen across most states, with particular strength in Queensland (up 4.2 per cent), South Australia (up 16.4 per cent) and Western Australia (up 7.3 per cent). Smaller rises in investor borrowing were seen in Victoria (up 1.4 per cent), New South Wales (up 0.1 per cent), the Australian Capital Territory (up 1.0 per cent) and Tasmania (up 1.4 per cent). 

For the eighth conscutive month, the number of owner-occupier first home buyer loans fell, down 5.6 per cent in September, to be down 27.1 percent since the January peak.

Ratecity noted Victoria, in lockdown, led the retreat with the number of first home buyer loans dropping 16.7 percent in the month, while NSW dropped by 3.1 percent.

Western Australia fhbs had the largest rise of 5.9 percent, while Queensland rose 2.1 percent and South Australia rose 4.3 percent.

ABS head of finance and wealth, Katherine Keenan, said the average loan size for owner occupiers has grown, but the value of new loan commitments for owner-occupier housing fell for the fourth month in a row, to $20.7 billion in September.

"Affordability constraints are biting in the first home buyer space, with dwelling prices rising by over 20% on an annual basis," the Comm Bank said.

NSW owner occupiers borrowed an average of $750,000 in September which was a record high.

The big banks are all now applying stricter loan criteria on applications as of November 1 given lending requirements imposed by APRA.

There has been positive growth in investors taking on mortgages since October last year

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Investors return to property with six year borrowing high: ABS 

RBA Governor Statement

At its meeting today, the Board decided to:

maintain the cash rate target at 10&nbsp;basis points and the interest rate on Exchange Settlement balances of zero per&nbsp;cent

maintain the target of 10&nbsp;basis points for the April 2024 Australian Government bond

purchase government securities at the rate of $4&nbsp;billion a week and to continue the purchases at this rate until at least mid February 2022.

Prior to the Delta outbreak the Australian economy had considerable momentum. GDP increased by 0.7&nbsp;per&nbsp;cent in the June quarter and by nearly 10&nbsp;per&nbsp;cent over the year. Business investment was picking up and the labour market had strengthened. The unemployment rate had fallen below 5&nbsp;per&nbsp;cent and job vacancies were at a high level.

The recovery in the Australian economy has, however, been interrupted by the Delta outbreak and the associated restrictions on activity. GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months. While the outbreak is affecting most parts of the economy, the impact is uneven, with some areas facing very difficult conditions while others are continuing to grow strongly.

This setback to the economic expansion is expected to be only temporary. The Delta outbreak is expected to delay, but not derail, the recovery. As vaccination rates increase further and restrictions are eased, the economy should bounce back. There is, however, uncertainty about the timing and pace of this bounce-back and it is likely to be slower than that earlier in the year. Much will depend on the health situation and the easing of restrictions on activity. In our central scenario, the economy will be growing again in the December quarter and is expected to be back around its pre-Delta path in the second half of next year.

Notwithstanding the strong economic and labour market outcomes pre-Delta, wage and price pressures remain subdued. Over the year to the June quarter, the Wage Price Index increased by just 1.7&nbsp;per&nbsp;cent.

Housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak. Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors. Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

Very accommodative financial conditions will continue to support the recovery of the Australian economy. Borrowing rates are at record lows, sovereign bond yields are at very low levels and the exchange rate has depreciated over recent months. The fiscal responses by the Australian Government and the state and territory governments are also providing welcome assistance in supporting household and business balance sheets.

The Board&#39;s decision to extend the bond purchases at $4&nbsp;billion a week until at least February 2022 reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak. The Board will continue to review the bond purchase program in light of economic conditions and the health situation, and their implications for the expected progress towards full employment and the inflation target. These bond purchases, together with the low level of the cash rate, the yield target and the funding that has been provided under the Term Funding Facility, are providing substantial and ongoing support to the Australian economy.

The Board is committed to maintaining highly supportive monetary conditions to achieve a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2&nbsp;to 3&nbsp;per&nbsp;cent target range. The central scenario for the economy is that this condition will not be met before 2024. Meeting this condition will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.

RBA holds rates, turnover declines following the virus outbreak: RBA Governor Philip Lowe's September 2021 meeting statement

The RBA has held interest rates at a record low 0.1 per cent at its September meeting.

RBA Governor Philip Lowe&#39;s said that housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak.

&quot;Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors, Lowe noted.

&quot;Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.&quot;

In Finder.com.au&#39;s monthly RBA Survey, AMP Capital chief economist Shane Oliver said the lockdown and its hit to the economy&nbsp;has further delayed the time when the effective RBA conditions &ndash; full employment and 3% or more wages growth to sustain 2-3% inflation &ndash; will be met to justify a rate hike.

[smartcode_project:default project_id=103179 project_image_fid=167473]

Commentator Saul Eslake said he takes the RBA at its word&nbsp;when it says it won&#39;t begin tightening monetary policy until the labour market is sufficiently tight to generate wage inflation that&#39;s sufficiently strong to push &#39;underlying&#39; consumer price inflation sustainably into the 2-3% target range.

&quot;While I think that may well be sooner than the RBA&#39;s &lsquo;central case&rsquo; of 2024, I don&#39;t think it will be any earlier than mid-2023,&quot; Eslake says.

Dr Andrew Wilson from My Housing Market says that no change in fundamental economic weakness confirmed again with low wages growth despite robust labour market.

&quot;As usual &ndash; absolutely no plausible case on current data for higher rates over the foreseeable future &ndash; and then there is Covid.&quot;

[smartcode_project:default project_id=102580 project_image_fid=167435]

New research from Finder reveals that over half of&nbsp;homeowners across the country&nbsp;are concerned about interest rates increasing in the near future.

Around15% fear they may not be able to make their repayments once rates creep up.

Finder.com.au&#39;s head of consumer research Graham Cooke says some homeowners may have purchased beyond their means in the midst of the housing market frenzy.

[smartcode_project:default project_id=22308 project_image_fid=75031]

&ldquo;The past 12 months have seen property prices explode as record numbers of Australians have fled into the housing market,&quot; Cooke says.

&ldquo;Low interest rates have encouraged many buyers to purchase earlier than they otherwise might have for fear of missing out.

&ldquo;But not all of them will have budgeted for their monthly repayments to go up if or before the cash rate increases,&rdquo; Cooke said.

Finder analysis reveals the average monthly mortgage payments in Sydney are worth 76% of the average worker&rsquo;s after-tax earnings &ndash; the highest in the country. Melbourne (57%) is not far behind, followed by Canberra (49%) and Hobart (49%). Perth is at the bottom of the list, with the average mortgage costing a more reasonable 35% of average earnings.

RBA Governor Philip Lowe's said that housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak

RBA leave cash rate on hold at September meeting

The RBA has held interest rates at a record low 0.1 per cent at its August meeting.

RBA Governor Philip Lowe&#39;s comments on the housing market were much the same, noting all markets continuing to strengthen, with prices rising in all major markets.

He did cite an increase in borrowing by investors, and that given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

The experts and economists surveyed in Finder.com.au&#39;s RBA Cash Rate Survey all called the cash rate hold, with 75 per cent predicting the increase won&#39;t happen until 2023.

Tony Makin of Griffith University was the lone expert predicting the rate to rise before 2022.

&quot;In coming months a clearer picture will emerge of underlying inflation trends both in the US and [in Australia]. The recent US inflation spike is unlikely to be temporary given the massive money supply increase, recovery from the pandemic, and substantial US fiscal expansion.&quot;

AMP Capital&#39;s Shane Oliver said the RBA is still a long way from meeting its conditions for a rate hike &ndash; namely inflation sustainably back in the 2&ndash;3% target range which will require full employment and wages growth sustainably above 3%. And the latest coronavirus outbreaks and lockdowns risk delaying progress towards its goals.

Over a third of experts (71%), called for a change in stamp duty.

They agree that changes need to be made to either stamp duty or government stimulus in order to help buyers enter the property market.

Just over half (54%) think that only stamp duty should be changed, while another third (29%) think neither should be changed.

Finder&#39;s insights manager Graham Cooke said an easing of stamp duty could reduce the burden for first time buyers and establish a more even playing field.

&ldquo;Stamp duty is essentially a tax that slows down the turnover of property. It discourages current&nbsp;homeowners from downsizing, which locks up some of the market. &ldquo;A long-term land tax would provide a fairer long-term solution, while adding liquidity to the housing market,&rdquo; Cooke said.

RBA holds rates at August meeting, experts call for stamp duty changes

RBA Governor Statement

The economic recovery in Australia has been stronger than was earlier expected. The recent outbreaks of the virus are, however, interrupting the recovery and GDP is expected to decline in the September quarter. The experience to date has been that once virus outbreaks are contained, the economy bounces back quickly. Prior to the current virus outbreaks, the Australian economy had considerable momentum and it is still expected to grow strongly again next year. The economy is benefiting from significant additional policy support and the vaccination program will also assist with the recovery.

The economic outlook for the coming months is uncertain and depends upon the evolution of the health situation and the containment measures. Beyond that, the Bank&#39;s central scenario is for the economy to grow by a little over 4&nbsp;per&nbsp;cent over 2022 and by around 2&frac12; per&nbsp;cent over 2023. This scenario is based on a significant share of the population being vaccinated by the end of this year and a gradual opening up of the international border from the middle of 2022. The Board also considered a range of other scenarios, with the main source of uncertainty being the health situation.

The labour market has recovered faster than expected, with the unemployment rate declining further to 4.9&nbsp;per&nbsp;cent in June. Job vacancies have remained at a high level and there are reports of labour shortages in parts of the economy. Some increase in the unemployment rate is expected in the near term due to the current lockdowns, but most of the adjustment in the labour market is likely to take place through a reduction in hours worked and in participation. In the central scenario, the unemployment rate continues to trend lower next year, to be around 4&frac14; per&nbsp;cent at the end of 2022 and 4&nbsp;per&nbsp;cent at the end of 2023.

The CPI inflation rate spiked to 3.8&nbsp;per&nbsp;cent for the year to the June quarter, largely reflecting the unwinding of some earlier&nbsp;COVID-19-related price declines. In underlying terms, inflation remains low, at around 1&frac34; per&nbsp;cent.

Looking forward, a pick-up in both wages growth and underlying inflation is expected, but this pick-up is likely to be only gradual. In the Bank&#39;s central scenario, it takes some years for the stronger economy to feed through into wage and price increases that are consistent with the inflation target. In underlying terms, inflation is expected to be 1&frac34; per&nbsp;cent over 2022 and 2&frac14; per&nbsp;cent over 2023. One source of uncertainty is the behaviour of wages and prices at the low levels of forecast unemployment, including because it is some decades since Australia has sustained an unemployment rate around 4&nbsp;per&nbsp;cent.

Housing markets have continued to strengthen, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, including first-home buyers. There has also been increased borrowing by investors. Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

Domestic financial conditions remain very accommodative, sovereign bond yields have declined and the exchange rate has depreciated to around its lowest level this year, despite elevated levels of commodity prices. The recent fiscal responses by the Australian Government and the state and territory governments are also providing welcome support to the economy at a time of significant short-term disruption.

The Board remains committed to maintaining highly accommodative monetary conditions to support a return to full employment in Australia and inflation consistent with the target. Together, the low level of the cash rate, the bond purchase program, the yield target and the ongoing funding that has been provided under the Term Funding Facility are providing substantial support to the Australian economy in the face of lockdowns in parts of the country and the expected resumption of the economic expansion.

The Board will maintain its flexible approach to the rate of bond purchases. The program will continue to be reviewed in light of economic conditions and the health situation, and their implications for the expected progress towards full employment and the inflation target. The Board will not increase the cash rate until actual inflation is sustainably within the 2&nbsp;to 3&nbsp;per&nbsp;cent target range. The central scenario for the economy is that this condition will not be met before 2024. Meeting this condition will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.

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NAB bring forward first RBA cut to February 2025

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