An article by Robert Gottliebsen in the Business Spectator starts with "Thank Goodness sanity prevailed in the Reserve Bank boardroom." He refers, of course, to the decision not to raise interest rates this month. The Reserve Bank is hopefully well aware of the devastating effect the November interest rate rise, and the associated media storm, had on the property world. That effect is continuing, and any further increase in interest rates could tip the market over the edge into a full housing price collapse.
The Reserve Bank statement talks up the mining boom, but Mr Gottliebsen argues they have not grasped the seriousness of the situation in non-mining Australia. Their statement does include "Growth in credit to households has softened, as have housing prices."
His article includes the sentence, "Tony Abbott and Julia Gillard are clashing horns over the carbon tax and both are missing the main issue."
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