Brendan Rynne, KPMG Chief Economist, said: “Last week’s consumer price inflation figures were higher than expected, mainly due to weather-affected fresh food prices and a hike in petrol prices. These influences are transient, which you can see by the fact that the underlying inflation rate (trimmed mean) is still below the RBA’s target rate.
On one hand, these figures could give the RBA theoretical justification for cutting interest rates tomorrow - but I would suggest it would do nothing to improve the housing affordability challenge currently facing Australia. Investor activity is still driving house prices and any rate cut will be swallowed up by that sector.”
Housing affordability should be the priority – and today KPMG Economics has released a paper putting forward new thinking on ways to mitigate the housing affordability crisis.
There is no single solution; this issue requires a response across several fronts.”
Read more: Housing Affordability: the Australian Dream
Senior Communications Manager, KPMG
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