The Australian economy and exchange traded funds (ETFs) have been battered on all sides, but government policies may assuage the bruises.
Rising Home Demand. The combination of Australian benchmark interest rate of 4.25%, a six-year low, and increased government grants to first-time home buyers is likely to increase demand for housing this year, reports Jacob Greber for Bloomberg.
Expansionary Policy. The monetary policy is slated as “expansionary” in a response to low business and consumer confidence. On Feb. 3, it is antcipated that Reserve Bank of Australia will cut overnight cash rate targets by 0.75%.
But it is noted that a rising unemployment rate, currently 4.5%, coupled with slow economic growth may keep demand for home loans down.