Reserve Bank increases interest rates as housing values rise
The move has surprised most economists as mortgage holders take another hit
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The Reserve Bank of Australia board has decided to raise the cash rate by a further 25 basis points following its meeting this afternoon. This brings the rate up to 3.85 percent.
Citing a persistently high 7 percent inflation rate for the move, which has eased at a slower pace than hoped, the board reiterated its target of bringing inflation down to more manageable levels this year.
“The Board held interest rates steady last month to provide additional time to assess the state of the economy and the outlook,” RBA governor Philip Lowe said in a statement. “While the recent data showed a welcome decline in inflation, the central forecast remains that it takes a couple of years before inflation returns to the top of the target range; inflation is expected to be 4½ percent in 2023 and 3 percent in mid-2025.”
Most economists predicted that the board would keep rates steady again this month, following criticism that it had not given the economy enough time to absorb the impact of previous rate rises.
Roy Morgan released research from February this year stating that almost 25 percent of mortgage holders were at risk of mortgage stress. The cash rate has now increased by 50 basis points since then.
Research director at CoreLogic, Tim Lawless, said the recent rise in housing values may have contributed to the board’s decision.
“Although housing considerations aren’t part of the RBA’s mandate, a return to a more positive housing trend could be accompanied by a lift in consumer attitudes, supporting consumption and potentially keeping inflation higher for longer,” he said.
“The lift in interest rates could act to dampen some of the recent housing exuberance, although a range of other factors are likely to support the continued stabilisation in home values including low available supply, extremely tight rental conditions and higher demand via net overseas migration.”
Mr Lawless predicted that today’s increase is likely to be the last following record rises over the past 12 months.
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The global architecture studio behind some of Sydney’s most recognisable towers unveils Civic Vision, its first Australian exhibition, celebrating more than five decades of design shaping cities worldwide.
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Foster + Partners has opened its first comprehensive exhibition in Australia, Civic Vision, showcasing more than five decades of the practice’s global architectural work.
Staged inside Parkline Place, the studio’s latest Sydney project developed by Investa on behalf of Oxford Properties Group and Mitsubishi Estate Asia, the exhibition highlights the firm’s contribution to civic architecture, urban environments and infrastructure.
Gerard Evenden, Head of Studio at Foster + Partners, said: “We are delighted to be putting on this first-of-its-kind exhibition in Sydney – a city we have been working in for more than 25 years. This is a fantastic opportunity to reflect on our holistic approach to civic architecture, which has underpinned our work since the 1960s, and continues to evolve to meet the challenges of today.”
Partner Muir Livingstone added: “It is a great privilege to showcase the practice’s work in Parkline Place – a project that we have been working on for the past six years – and the new home for our Sydney studio.
“Our projects in the city exemplify the civic and sustainable approach that the exhibition centres on. From our first Sydney project, Deutsche Bank Place, which features a four-storey public plaza at its base, to our work for Sydney Metro, which is transforming the way thousands of people travel across the city.”
The exhibition is organised around three themes – Community + Culture, Living + Working, and Planning + Mobility – and features Australian projects including Deutsche Bank Place, Salesforce Tower and Parkline Place, alongside international works such as the Hong Kong and Shanghai Bank Headquarters, the Reichstag German Parliament, and the soon-to-open Zayed National Museum in Abu Dhabi.
Since the 1960s, Foster + Partners has expanded its approach beyond technological innovation to encompass social and environmental design, producing masterplans for carbon-neutral cities and civic infrastructure that prioritise light, clarity and connection.
Civic Vision runs until 21 December on Level 2 of Parkline Place, 252 Pitt Street, Sydney. Entry is free and forms part of the Sydney Open festival program.
On October 2, acclaimed chef Dan Arnold will host an exclusive evening, unveiling a Michelin-inspired menu in a rare masterclass of food, storytelling and flavour.
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