The RBA's top economist is warning of a 'perfect storm' for housing but says rates aren't to blame
Chief economist Sarah Hunter says she's still working through the impacts of the budget on inflation.
The Reserve Bank’s top economist has distanced interest rate increases from rapidly rising rents following a double-digit increase in Commonwealth Rent Assistance, saying it's not the central bank to blame for affordability issues but rather high levels of demand and a struggling construction sector.
RBA chief economist Sarah Hunter, who joined the central bank in January from federal Treasury, told Capital Brief her team was in the “early stages of assessing” what the federal budget's new spending means for the economy and inflation. But she brushed off concerns that a further rise in rent assistance would have a significant impact on increasing overall rents.
“We are considering the federal budget and, indeed, all of the state budgets, the context of the outlook for the broader economy and that includes inflation,” Hunter said, less than 24 hours after the budget was handed down.
The RBA is due to publish its next set of revised forecasts in August. Hunter's predecessor Luci Ellis expects the impact to be broadly neutral for the central bank's outlook.
