Australia Consumer House Price Sentiment Could Justify RBA Hold in Feb

By Sophia Rodrigues

Published On 22 Jan 2020 , 11:36 AM

Consumer sentiment fell 1.8% to 93.4 in January from 95.1, the Westpac-Melbourne Institute Index of Consumer Sentiment showed. The fall was in response to the devastating bushfires and while the 1.8% drop was not as severe as one would have expected, Westpac points out this might be because the index was already at a low level.
More interesting in the survey were housing related sentiment, with "time to buy a dwelling" and "index of house price expectations", both rising sharply in January. Westpac said the boost in optimism this time has beem more "dramatic" than in previous cycles, and indicate the current period of positive price action is unlikely to end in the near term.
The question is whether the RBA will take comfort from this continuing impact of easy monetary policy on housing market, and make a case for hold in February?

 

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