17 Dec Oliver’s Insights – The Australian economy in 2019 – house prices, growth and interest rates
The attached note looks at the outlook for the Australian economy in the face of the housing downturn and fears this will cause a sharp downturn in growth, and what it means for investors.
The key points are as follows:
- Australian growth has slowed again. The housing cycle downturn and its impact on the economy will likely see growth constrained to around 2.5-3%.
- As a result, spare capacity is likely to remain significant, keeping wages growth and inflation low.
- The RBA is likely to cut rates in 2019 and the housing downturn will likely see Australian shares continue to underperform global shares.