We have seen a raft of comments and discussions from the governor of the Reserve Bank of Australia. The message has been disjointed. What has come through, whether he realises it or not, is the fundamental disconnect between government policy and central bank policy. On one hand, Australia is being flooded with record levels of new immigrants, putting upward pressure on rents and services. Supply in that area is not elastic. New houses and infrastructure take years to build.
If we are relying on rising interest rates to crush demand so that “we need more people to live in each dwelling”, then we need a recession.
In this week’s investment podcast, Nucleus Wealth Chief Investment Officer, Damien Klassen, Chief Economist, Leith van Onselen and Senior Financial Adviser, Samuel Kerr delve deeply into the matter at hand.
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