Decoding RBA Cash Rate Adjustments: The Data Behind the Decisions, Property Market Impacts & the Puzzle of Rising Property Values (Ep. 220)

Previously known as “The Property Planner, Buyer and Professor”
 

Got a question for the trio?

Submit our online form!

Highlight segments:

14.30 – Labour market data: wage growth, unemployment and unit labour costs

17.30 – Dave reminds listeners of the historical inflation figures and the meaning of wage growth spiral

19.20 – Dave sheds light on the relevance of the Australian Productivity Commission

24.55 – Unit Labour Costs explained, “a key measurement that the RBA looks at”.

26.30 – Mike poses a question to Dave about building widgets, a real-life example of productivity boosts

37.25 – Dave shares the history of productivity in Australia

43.28 – Why are overseas economies so important to track?

52.45 – Gold Nuggets

Show notes:

Welcome back to the Property Trio podcast for the third episode in our inflation trilogy Ep 220 Decoding the Data Behind RBA Decisions – Property Market Impacts and the Puzzle of Rising Property Values 

Cate is thrilled to be your host once again and gives a huge shoutout to Dave for tackling these complex topics so brilliantly. Making the complicated simple is no small feat! 

So, what are the key data points that the Reserve Bank looks at when deciding to make rate adjustments? 

Household Consumption: Dave says we’re just seeing the beginning of the drop in this area. From pandemic savings leading to a YOLO spending spree to supply chain impacts and cash stimulus, Mike recalls how we got here. 

Labour Markets: Dave breaks down what this actually means and its connection with unit labor costs, unemployment, and wage growth. 

Neutral/Preferred Level of Unemployment and Cash Rate: How does unemployment affect inflation? Stay tuned to find out! 

Productivity: Mike and Dave dive into topics like migrant worker policies and the Australian Productivity Commission. “Long-term productivity growth is crucial for our living standards,” says Dave. 

Overseas Economies and Interest Rates: Our world is interconnected. From global capital flow to economic partnerships, Mike and Dave discuss how overseas economies matter. 

Why are property prices still rising despite economic headwinds? Dave shares nine reasons (yes, NINE!) that have contributed to the resilience of our property markets. 

Future Projections: What could make property prices climb again after they plateau? We all weigh in on this intriguing topic. 

Gold Nuggets:

Cate Bakos’s gold nugget: “For any listeners with interstate property, it pays to scout around for some good tradespeople.”

Dave Johnston’s gold nugget: Prices are starting to stabilise. “Your trend is your friend” states Dave, but what happens once prices have plateaud? Dave shares his predictions for economic activity and how this will translate into property price movements.

Mike Mortlock’s Mike reminds listeners that they don’t need to master economic data, but they should at least pay attention to RBA meeting notes, what’s happening with the cash rate, and what the RBA is looking at. “….but if you don’t want to subscribe to the RBA, just come to the Property Trio”.

 

Resources:

Ep. 89 – Capital growth – what increases property value?

Ep. 119 – How supply and demand dictates market movements – Part #1 Macro-economic forces

Ep. 158 – How interest rate cycles have impacted the property market since 1990 when the RBA first started targeting the cash rate and some predictions on what will happen this time

Ep. 217 – The Inflation Conundrum: Unravelling its Causes and Consequences

Ep. 219 – The Role of the Reserve Bank of Australia (RBA), Why they Target Interest Rates & Why we Need Inflation, Just not too much!

https://www.abc.net.au/news/2022-09-30/queensland-land-tax-government-shelves-changes-after-opposition/101491332

Listen to Our Podcast

180+ 5tar Reviews, Over 400,000+ Downloads

Join Our Newsletter

Subscribe to “The Property Planner, Buyer and Professor” Newsletter

4 + 4 =

Email us your questions or any topics you would like to be covered off on in future episodes:
Follow the podcast on social media