Rates on hold as RBA Board keeps a watch on inflation

Interest rates will remain on hold for another month, the RBA Board announced today.

In a statement released by Dr Philip Lowe – his last as governor of the RBA – he said the current 4.1 percent interest rate is creating ‘a more sustainable balance’ between economic supply and demand.

“In light of this and the uncertainty surrounding the economic outlook, the Board again decided to hold interest rates steady this month,” Dr Lowe said. “This will provide further time to assess the impact of the increase in interest rates to date and the economic outlook.”

The news was widely expected among economists and the major banks following the announcement that the rate of inflation had fallen to 4.9 percent in July, down from 5.4 percent in June.

Dr Lowe said inflation had passed its peak but it was still too high.

“While goods price inflation has eased, the prices of many services are rising briskly,” he said. “Rent inflation is also elevated. The central forecast is for CPI inflation to continue to decline and to be back within the 2–3 percent target range in late 2025.”

CoreLogic research director Tim Lawless said rents would most likely continue to put pressure on inflation for some time yet.

“CPI rents, which are allocated the second largest weighting within the CPI ‘basket’, remain a major inflationary driver, with the monthly CPI indicator reporting a 7.6 percent rise in the cost of rents in the year to July, accelerating from 7.3 percent in June.

“The trend indicates no slowdown in growth for rents paid.”

Acknowledging the two speed economy, Dr Lowe said some Australians were feeling the financial pinch of elevated interest rates more than others.

“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,” he said.

However, he did not rule out further rate increases.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks,” he said. “In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in household spending, 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.”

Dr Lowe will step down as governor in two weeks’ time. He will be succeeded by Michele Bullock.

In 2021, actress Emma Stone purchased a historic estate in Austin, Texas, with a plan to move her family there. Four years later, she has instead decided to put the property on the market.

The actress and her husband, comedy writer Dave McCary, are asking $26.5 million for the newly renovated estate, according to Eric Moreland of Moreland Properties/Forbes Global Properties, one of the listing agents. The 1.25-acre property, located in the upscale Tarrytown neighbourhood, will be among the most expensive on the market in Austin.

Stone and McCary have spent more than three years renovating and restoring the Texas property, Moreland said.

A spokesperson for Stone didn’t respond to requests for comment. Moreland said the couple’s New York business interests have expanded since they started the remodel, and while they hope to live in Austin eventually, it doesn’t make sense for now.

The couple, who are co-founders of the production company Fruit Tree, own a roughly $12 million apartment in lower Manhattan, according to property records. Stone is slated to star in the upcoming contemporary Western film “Eddington.”

It’s unclear what Stone and McCary paid for the Austin property, since Texas is a nondisclosure state . The Georgian-style brick house dates to around 1940, making it one of the oldest estates in the area.

The roughly 10,000-square-foot estate includes a main house with four bedrooms and a two-bedroom guesthouse. The property also has a pool, a hot tub, and a garage with a screening room and entertaining space above.

As part of the renovation, the couple removed, cleaned and reused all the exterior brick. They also reconfigured some of the living spaces, opening the kitchen to the living room for a more modern layout. It took more than a year just to install the millwork in the screening room, said Moreland.

The contractors are now putting the finishing touches on the property, he said.

The “La La Land” actress has a track record of buying and selling her homes for significantly more than she paid. In 2022, she sold her blufftop Malibu, Calif., home for $4.425 million after buying it for $3.25 million in 2018, according to property records.

Last year, she sold her home in L.A.’s Comstock Hills neighbourhood for $4.3 million, significantly more than the $2.3 million she paid in 2019.

Austin saw an influx of new residents during COVID, but many of those are now returning to the East and West coasts, particularly workers in the tech sector.

While the market “has come down to earth a little bit” since the pandemic-era boom, Moreland said, he has seen a number of $20 million-plus deals over the past few months.

Moreland has the listing with colleague Diane Humphreys.

Rates on hold as RBA Board keeps a watch on inflation

The Board presses pause on another rate hike for the third consecutive month

The actress and her husband, comedy writer Dave McCary, spent more than three years restoring the house, which is one of the priciest properties for sale in the Texas city.